Fuchs (ETR:FPE3) reported higher sales and earnings for the first half of 2026, citing strong demand, broad-based volume growth and its ability to supply customers amid raw-material shortages. The lubricant supplier also raised its full-year EBIT outlook while cautioning that some of the first-half sales momentum was temporary.
Sales rose 11% year over year to €2 billion in the first six months, while EBIT increased 24% to €260 million, the company’s highest first-half EBIT on record. Free cash flow before acquisitions declined to €61 million from €81 million a year earlier, mainly because inflation and higher sales increased net operating working capital.
Second-quarter demand drove volume growth
Second-quarter sales reached €1.1 billion, up 21% from the prior-year period and 14% from the first quarter. Saglik said roughly one-third of the growth came from expanding Fuchs’ business, another third from customer pre-buying, and the remainder from customers shifting purchases to Fuchs when other suppliers could not obtain sufficient raw materials.
Organic growth contributed about €200 million, or 12%, during the first half and was mainly volume driven across all regions. External growth added €25 million, largely reflecting the full consolidation of Fuchs’ former Turkish joint venture after its acquisition closed at the end of April. Currency effects reduced sales by about €26 million, or 2%, though the foreign-exchange impact improved during the second quarter.
Fuchs’ second-quarter EBIT rose 34% year over year to €135 million. The company said the comparison benefited in part from a weak second quarter in 2025, when its Americas business was affected by uncertainty surrounding tariffs. Still, EBIT also increased 8% sequentially from the first quarter.
The first-half EBIT margin improved to 13% from 11.6% a year earlier. Gross margin was 34.8%, broadly in line with the prior-year period, although slightly below the 35.1% reported in the first quarter. Functional costs rose €20 million, driven by sales and research-and-development expenses, reformulation efforts to secure supply, and one-time items.
Regional results improve across the group
EMEA sales increased 11%, with contributions from Germany, South Africa, Poland, Italy and the U.K. EBIT in the region increased €16 million, or 14%. The result included €3 million of at-equity income, mainly from Fuchs’ Saudi Arabian joint venture partner.
Asia-Pacific organic growth reached 14%, led by China and Australia. Regional EBIT rose €27 million, or 42%, including a €7 million one-time gain from the sale of land in Australia recorded during the first quarter.
Sales in the Americas increased 7% despite adverse currency translation, while organic growth was 13%. North America was the primary driver, although South America also exceeded the prior-year level. Management said Americas EBIT more than doubled in the second quarter from the year-earlier period.
CEO Stefan Fuchs said automotive aftermarket and mining were among stronger areas, while industrial output faced some pressure from European conditions and tariffs. He said growth was broad across regions and that smaller product areas, including medical applications and cooling fluids, remained too small to materially affect group-level results.
Supply constraints and Saudi fire remain key considerations
Management said disruptions in the Middle East have created shortages in Group III base oils and polyalphaolefins, while some refineries and production units remain offline. Fuchs said its global sourcing network and local-to-local procurement strategy allowed it to secure sufficient raw materials during the first half and maintain customer supply.
The company has implemented several rounds of price increases and aims to offset raw-material inflation through pricing. Saglik said net pricing was positive in the second quarter, though management cautioned that rapid input-cost increases can create a lag before price adjustments fully take effect.
Fuchs also disclosed a fire at a production site in Saudi Arabia that caused severe damage to the facility, though no injuries were reported. The company does not expect production output from the plant for the remainder of 2026 and said rebuilding major parts of the facility could take more than a year. Management said it expects to use alternative supply sources and does not anticipate that the incident will affect its updated guidance.
Stefan Fuchs said the Saudi site primarily serves the local Saudi market and that the company’s joint venture partner is the primary decision-maker regarding reconstruction. He added that the group expects to continue serving customers through alternative sources.
Full-year EBIT guidance raised, but company warns against extrapolation
Fuchs raised its 2026 EBIT forecast to a range of €460 million to €480 million, compared with its prior expectation of around €450 million. It maintained its sales outlook for a figure significantly above €3.7 billion and continued to expect free cash flow before acquisitions to be significantly below €270 million.
Management said the first-half performance should not be extrapolated into the remainder of the year. Pre-buying effects are expected to reverse during the second half, while some demand from customers affected by competitors’ supply constraints may prove temporary. Stefan Fuchs said the pre-buying effect should be largely offset across the full year by lower volumes later in 2026.
Net operating working capital rose to €910 million, primarily due to inflationary effects on inventory, although it remained relatively stable at 21.3% of annualized sales. Net liquidity fell to €13 million at the end of June from €151 million at the end of 2025, reflecting a €160 million dividend payment, the Turkish acquisition and working-capital needs.
“For the full year, we are confident,” Stefan Fuchs said, while adding that visibility remains limited because of the evolving supply situation and Middle East conflict.
About Fuchs (ETR:FPE3)
Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils.
