Fuchs ETR: FPE3 reported record earnings for the first nine months of 2026, citing broad-based sales growth, pricing actions and cost discipline, while raising its full-year outlook despite continued volatility in raw-material markets and limited visibility into demand trends.
Sales rose 16% year over year to €3.1 billion in the first nine months, while earnings before interest and taxes increased 25% to €409 million. The company’s EBIT margin improved by 1 percentage point to 13.1%.
“This is a new record result and shows the strength of our earnings performance,” Chief Financial Officer Esma Saglik said on the company’s third-quarter conference call.
Third-Quarter Sales and Earnings Accelerate
Third-quarter sales totaled €1.1 billion, up 25% from a year earlier and 5% from the second quarter. EBIT reached €149 million, increasing 27% year over year and 10% sequentially, marking the company’s highest quarterly EBIT to date.
Saglik said the drivers of growth shifted during the year. Volumes were the main contributor during the first half, while pricing became a more significant source of growth in the third quarter as raw-material costs increased. Volumes normalized in the third quarter but came in better than expected, she said.
Organic growth contributed €359 million, or 13%, to nine-month sales growth. External growth added €68 million, primarily from the full consolidation of Fuchs’ former joint venture in Türkiye. Currency effects were broadly neutral over the nine-month period and improved in the third quarter.
Gross margin stood at 34.3%, slightly below the prior-year level, mainly because of inflation on sales. Other functional costs rose 6%, below the 16% increase in sales, with the increase attributed mainly to the acquisition in Türkiye along with higher freight and selling costs.
The results also included a mid-single-digit-million-euro negative one-off impact related to a fire in Saudi Arabia, recorded in the company’s at-equity result. In Asia-Pacific, EBIT included a €7 million gain from the sale of land in Australia that was booked during the first quarter.
Regional Performance
- EMEA: Sales rose 17%, including 12% organic growth. Germany, South Africa, the U.K., Poland and Italy made strong contributions. EBIT increased 15% to €196 million.
- Asia-Pacific: Sales increased 13%, with 12% organic growth, led by Australia and China. EBIT rose 28% to €131 million.
- Americas: Sales grew 14% despite negative currency effects, while organic growth was 17%, driven chiefly by North America. EBIT increased 42% to €81 million, with both North and South America contributing.
Chief Executive Officer Stefan Fuchs said China remained a demanding market, though the company’s Chinese operations continued to grow. He also described the U.S., Canada, Mexico, South America and Asian markets including Japan and Korea as areas with growth potential.
On end markets, Fuchs said industrial activity had shown an uptick, while pre-buying was concentrated primarily in the automotive aftermarket. The company said its automotive aftermarket business represents about one-quarter of total sales. Large industrial and business-to-business customers generally have limited capacity to build inventories, Fuchs said.
Working Capital Pressures Cash Flow
Free cash flow before acquisitions was €92 million, down from the prior year as higher raw-material prices and sales prices increased working-capital requirements. Net operating working capital exceeded €1 billion at the end of September, representing 23.1% of annualized sales.
Inventories rose €210 million compared with the end of 2025, mainly due to higher raw-material costs. The balance of receivables and payables increased by another €104 million, reflecting higher price levels. Net liquidity stood at €41 million after dividend payments and acquisitions.
Capital expenditure was €61 million and remained in line with the company’s full-year guidance.
Outlook Raised as Raw-Material Conditions Remain Tight
Fuchs raised its 2026 outlook, now expecting sales of around €4.1 billion, EBIT of around €500 million and FVA of around €300 million. Its free-cash-flow outlook was unchanged at significantly below €270 million, reflecting the buildup in working capital.
The company expects fourth-quarter sales to remain above the prior-year level, primarily due to inflation. However, it expects volume growth to slow because of pre-buying in the first half and typical year-end seasonality.
Management cautioned against extrapolating the strong second-quarter result into the fourth quarter. It cited risks around volumes, costs and margins, as well as continued volatility in raw-material markets.
Saglik said crude oil, freight costs and risk premiums were continuing to pressure chemicals and base-oil prices. Supply conditions remained tight, particularly for Group III and Group IV base oils, and the company believes the market has not yet reached its peak. Fuchs said it was managing the environment through a broad sourcing network, customer discussions and pricing actions.
Looking toward 2027, management did not provide formal guidance but said it expected pre-buying effects to normalize and currently anticipated a return to its normal growth rates. Saglik said the company had secured some longer-term contracts and expected to retain some of the gains made during the second and third quarters.
Expansion in Africa and U.S. Technology Investment
Fuchs also announced that it acquired the remaining stakes in joint ventures in Mozambique, Zambia and Zimbabwe, making them wholly owned. The three businesses have combined annual sales of about €50 million and approximately 170 employees, according to Stefan Fuchs. The company also increased its holding to more than 50% in a Tanzanian venture and formed a small joint venture in Kenya with the same partner.
In North America, the company opened an Americas Technology Center in Taunton, Massachusetts, near its Fairhaven site acquired through the Nye transaction. The center supports customers in semiconductor, medical, aerospace and satellite markets.
Fuchs also said it extended its customer-brand relationship with Mercedes-Benz for three years. The arrangement began in 2024 and includes products carrying Mercedes-Benz branding while identifying Fuchs as the technology partner.
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.
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