Fuchs SE (FPE3) Earnings Call Transcript & Summary

Okay. Good morning, everybody. So we are at 10 a.m., and it's the 28th of June. So we are having the Capital Markets Day. A very warm welcome from my side. We're very happy to have you here. And after having 3 years, not having this event, we are more than happy to see you here today in-person and to also host this event at our new office building in which we moved in April. So we're happy to have you here. And before I go into the agenda, I want to quickly make some opening remarks or also some housekeeping remarks. We have a live stream. So this is why we have the camera there. This is why I'm speaking on the microphone and would ask you later within the Q&A session to raise your hand if you have questions, and I will then give you a microphone, as you may ask then all the questions you have. So having a quick look at the agenda of today. So Stefan will take over in a second. He will come along with the key messages that we want to bring across today. And then we will also tell you something about the Fuchs 2025 journey in which we are and he will take on with the cultural part. We will then have a coffee break. And then all the other colleagues, which are sitting over there, Timo, Ralph, Lutz will -- and Dagmar, of course, as well, will take over, and they will present you structure and strategy with regards to the Fuchs 2025 program. Dagmar will then continue with the long-term financial targets at noon. I'm sure you are very interested in that topic. And after that, we will have a lunch. So it will take place in the cafeteria, which is close to the entrance. And as the weather is good, we will have it here in the place close to my left-hand side. So we can sit outside that will be great. After that, after lunch, Lutz Lindemann will be taking over to present sustainability, what we are doing with regard to that. So it's a very important topic for us. We're looking forward to that. And after Lutz is finished, we will have another coffee break. So as you see lots of coffee you can have today, but no worries other beverages will be served as well, and it's taking place outside of this room where you have just been. So everything should be in place there. Then at 2 p.m., Timo and Ralph will elucidate on the topic of mobility transition. I'm sure you're also very interested in that topic. And then there will be another coffee break. So again, lots of possibilities to have a coffee and a chat. And finally, we will have the Q&A session. We decided to have that in the end to really -- yes, consolidate that in the end. We thought it was a good idea to bundle it a little bit because some of the questions you may have will be answered in later stages of the presentation. So this is what we will have in the end. And yes, then Stefan will close the Capital Markets Day roughly at 4 p.m. So this is the agenda for today. And having said that, I would like to hand over to Stefan and he will continue.

Thank you very much, Lutz. And everyone, welcome from my side as well. Also with regard to my Board colleagues, the entire Board is with you today here in the room, but also for you in your offices. I think it's very nice that we offer a hybrid version, life on the stream in our Internet, a very warm welcome from my side again. First of all, before we go in more of the content, as you know, we had a change in our Supervisory Board. So we have the German Supervisory Board, which assembles 4 members representing the shareholders and 2 members representing the employees. Dr. Bock gave us notice in October that he wants to step down from being the Supervisory Board President after 3 years. So we had a good handover until May this year, and Christoph Loos, who was on the committee already since 2 years, he is now our new Chairman. So he was voted after the shareholder assembly in May this year. Mr. Loos is 54 years old. He is the CEO of HILTI, So they do about EUR 5 billion in sales. They have 30,000 employees. I find it a very fascinating company because of their marketing expertise. They have great IT systems and really good HR works with regard to succession planning. So we are happy to have him being our Chair. If you might have read in the news, he will step down as being the CEO of HILTI at the end of this year, and he will become the Chairman of there, they call it [Foreign Language] in Switzerland. It's a little bit more an active Supervisory Board because they also get much more engaged in the strategy part. So that is a really big deal to become the [Foreign Language] President, especially with regard to the HILTI family. He will have adequate time then also for our mandate. When we knew we were one person less, we were actively looking for a chemist. And thanks God with Markus Steilemann, many of you know him by covering Covestro. Covestro is one of the buyers spin-off aside of [indiscernible], and he is 52 years old. He is a PhD chemist. It's his first mandate he now took over. And he got elected in the May shareholder assembly, and we will, for the first time, experience in next week when we have our July, what we call, the strategy meeting of the Supervisory Board. And my sister here represents also the family in the Board, Ingeborg Neumann, is very stable, our Audit Committee Chairwoman. And then Jens Lehfeldt, Cornelia Stahlschmidt, those are our employees and also their heart is very close to the company. And I think we don't have 3 meetings and things like this, we just discussed openly together. And I think what you see here is really what we call in Germany, the Independent Supervisory Board. And I think that's the big deal moving forward, and we very much look forward as the support because I like to be challenged. And I think that's going to be a really good working relationship. The Executive Board. You know all my colleagues. You know we have a change coming up in the CFO part. Dagmar told me in October of last year that she wants to go back to Rheinmetall, where she, I think, 10 years ago came to us, and she wants to move to [indiscernible]. So we took the opportunity and had an independent headhunter. We noted down what we were looking for. So we were looking for someone with international experience, being really good in performance management and digitalization. And we were very clear that she took a day off today, and she is here with us, with Isabelle Adelt , and she will introduce herself to you.

Perfect. Could you hear me loud and clear? Should I start over again? Okay. Perfect. So I stayed in [indiscernible] in Poland for 2 years. This was a very rewarding experience. We built up the center from scratch. So when they win their [ fifth wing ] we did, we looked for offices to stay. We went [indiscernible] to buy some furniture, and after I left after more or less 2 years, we were 150 people. So this was honestly one of really my heartfelt projects, one of the best experience I have at my professional career so far to really start something from scratch and then see how it develops, hire one person after the other and make it work. Once this little baby was done, I moved back to headquarters at Germany and took over the Executive Board Office for the CFO. The next 3 years, I work very intensely on topics all around performance management, digitalization and working capital management. So we introduced a new group reporting and consolidation system very strict focus on performance management and increasing transparency, compliance and speed when we can deliver data and how we steer the business. We set up a very, very best working capital management program, where we could free up more than EUR 100 million in terms of cash during that program. And then during that part of the journey, my baby was setting up site digital innovation partners. Very interesting companies, an incubator inside of site where we said we deliberately rent some really lofty nice new offices in Munich, and as a service for all of the business groups, we offer digital innovation. We take completely new paths down and try to come up with new business models and take the digitalization to the next stage. After 2 to 3 years, we started to discuss what could be the next step. And gladly, I was offered to move to Shanghai in China and take over as their CFO for the Greater China business. So state in Shanghai a couple of years. During that time, site China or site Greater China became the biggest part of the group, accounting for roughly 1/3 of the average of the group, more than 6,000 people, very rewarding. We set up site in Taiwan. We really moved site to the next level, work closely with the government. During that time, our former boss at site, Thomas Spitzenpfeil moved on, moved to a new company called SCHENCK. This is where he currently work. So little detour into the wonderful world of private equity for the last 3 years, and we prepared SCHENCK to go public, which was the initial plan. So during the last 3 years, I spent most of my time establishing governance structures, building up risk management systems, building up quarterly reporting [ tax rate ] plans. Blackstone, our investor, decided to go down a different path beginning of this year. So we are not doing an IPO, but the company is currently for sale -- being sold in parts, as you can see in the news. So it's split into 3 different parts right now. So that plan to becoming CFO of that company was no longer an option, and this is why I'm happy to be here. Yes, join the Fuchs family and a couple of weeks from now. So thanks for having me today.

Thank you, Isabelle. So Isabel will join us on November 1 and there will be a 4-week handover with Dagmar, and I think then we will be well equipped. So thanks again. Lutz mentioned it before, we will have key messages at the beginning of the meeting. And then at the end of the meeting, and you will find all the key messages during the meeting again. And I want to run you quickly through. Our top 6 key messages for today is lubricants, which is our core business, and then I want to run you through what jobs lubricant is doing and why lubricant is ideally equipped for the technical transformation. The second key message is that we believe we are an innovation enabler for our customers. The third part comes together with the mobility change with an emphasis on the e-mobility part. Fourth part will be sustainability. Number 5 is digitalization and number 6 is growth. And you see already a number on the screen, but I come back to that number in a moment. So first of all, lubricants. We really love lubricants, and I want to run you through what look against what type of a function they have, and you will find out ultimately that they are a functional fluids. And they have different jobs to perform, and I think all those jobs play quite a nice role in all of the 3 large mega trends digitalization, sustainability and e-mobility. So first of all, lubricants reduce friction between moving systems, and there are many, many moving systems in the world. You get in touch -- things got not in touch, but you use our lubricants on a daily basis. And you see many of our applications. The second part is, we separate surfaces by a film, and we protect from where the cool machinery and equipment, and that comes back later when Timo and Ralph cover the e-mobility part. We protect surfaces from corrosion. We always say, paint is the ultimate protection. Our products are like intermediate protections for a certain period of time. And our products transfer energy, and if you look at those jobs, you think about the technical transformation. You will clearly find out that lubricants are very decisive, helps on a daily basis for our customers. And last night, I was asked about manufacturing capacities. We live in applications. And when we go to our customers, we understand their processes and their applications. Lutz hates me for saying that, but we have great chemists, but our customers don't really get caught in chemistry. They have a process and the company to run, and they want that our products help them, and very often, our products are a small expense for them, but a great impact. And that's the big deal of a lubricant being a functional fluid. And I think, therefore, we are very much application-driven. We have lots of dedicated people who talk the language of the customer. It's different language from a food plant to a mining plant or to a winter, and therefore, it's very important to just establish that lubricant for us is a great Eldorado moving forward. The other part is being an innovation enabler. And many of you think about engine, steel mills, mining, but there are so many fascinating applications we serve. So if you look on the lower left, that was part that we acquired from Nye. If you take a diabetes injection, there is a spring inside that injection, which is decisive of how quickly the injection goes in the skin and out, and there's our lubricant coating on the spring. It's a huge business for us and it's growing. So you can just imagine what kind of an impact such lubricant has in a diabetes injection. It's nothing you normally think about when you talk about lubricants. Then you go to Nye, it's also why we keep their location. We manufacture those products in clean rooms. It's not like a major blending plant with holding tanks and things like this. Therefore, we keep the Nye in Fairhaven. [indiscernible] has the Kaiserslautern site. Many of you who know us longer, for the small type of products, we very often we take intermediate out of the group and manufacture to end product. That's what we do out in Fairhaven. And that is just one of the examples. All of their business in Nye is around medical, semiconductors and car interior. So they are responsible for -- if you turn the windshield wiper on and if it doesn't make a noise and things like this. If you go to the upper right, you see robots. They also need lubrication, and there are plenty of robots today in plants. We also have changed our filling lines to know, from going from hand packing to a robot machinery. Lower left is a huge business for us. It was growing over the last years and will continue to grow. We talk about the creases and the gear oils. In the wind mills, we talk to the OEMs the original manufacturer of the wind mills, and we also talk to the wind park operator. And we see offshore and onshore. There are a few very large wind countries in the world that I'll come back to that later during the segmentation part, but it's very important to follow such a niche on a global basis. And if you go to the lower right, you see a cooling device. And many of you might not know, but when we went to school, a university, you go in a server room and it was nice in summer because it was cold. Today, air condition doesn't get any more the drop down for the compacted server. And in most cases, large servers today, they sit in the liquid and that comes for the heat out of the liquidity call it in the immersion cooling. And if you think about the cloud computing, there are many clouds, but the data still sits somewhere. So there are huge data centers today build and that immersion cooling is a nice product, and you can take the know-how you have got there also to cooling batteries. That's the cooling part of lubricant and to have a computer sitting in a liquid, which was, for me, totally strange, but that's one part of it. Just to show you a little bit when I talk about an enabler for innovation. And very often, I get asked what happens if like a commodity product ties off because the application changes. The more you go to the niches and the more you have high-tech involved, the less competition you've got. Normally, your normal commodity competitors, they disappear and you have got totally different companies you compete with. So that was my second part. The third part is the whole e-mobility part. And on the mobility part, this is on a fast track. My personal opinion that ultimately, and nothing is black and white in life, but ultimately, it will be [indiscernible]. You will have a battery, you will have a fuel cell and you will have a clean fuel. But you will have a combustion engine, a battery car and a fuel cell, but the mobility change is coming on. We see -- for our world, we see roughly a market of $3 billion for the e-batteries and the EV cost. And we said on a conservative basis for us, round about 50% is a relevant market for us. When it comes to [indiscernible] fluids, cooling, electrolytes, those type of things, and Ralph will cover the E-lyte later. So it's a very interesting part. So for us, the entire mobility change is good news because it gets high tech again. You need all the cases in the car. You need cooling fluids. You need [indiscernible] fluids. Yes, in those passenger cars not running in the city, they might disappear, so you don't have that engine oil part. But we also made a large statement where Lutz and Ralph and Timo will go through later. When you look at the entire car population, with all the ambitions from all the companies, and there will be a change in Europe coming up. They discussed it, it's 2035 or 2040. We see, for the next 10 to 15 years, the number of cars on combustion engines increasing, despite looking at Europe, you have got the Chinese market growing. You've got Africa going. So again, in a summary for us, e-mobility is a net opportunity because what is falling away is also more on the commodity condensed price pressure part, and therefore, I think that will be an interesting section for today. The second part is also for us very interesting is the whole sustainability area. When you take the whole CO2 balance of a lubricant, the least is happening between our gates because fundamentally, we steer products at ambient temperatures. The most is happening on the raw material side or at our customers. So it's very important for us to go along the entire value chain, and again, our lubricants can help our customers to lower their CO2 footprint. I think that's the big deal to have lubricants, helping them to run their processes more efficient coming back from the application side. And that's something where Lutz will run you through later today through electrolyte side and things like this. And again, new requirements. Life will be more difficult. Good news for us. We are the only one who is doing lubricant for all the product and application portfolio on a worldwide basis. EU taxonomy is a tough one. Everything which comes is tough, but it's much more tougher for the small ones than for us. And again, for us, we see sustainability is quite a nice opportunity for the future. Then we go to the digitalization and digitalization, obviously, you think about the journey to S/4HANA. You think about global processes and you think about global data. All of that is very relevant for us. When we think about digitalization, we really think about how does the customer experience doing business with folks. And that's, for us, the main part -- and Dagmar will lead you later show. So we have one project, we called it Fuchs Goes Digital. We had an outside consulting company involved with our entire GMC. Our operating committee involved. And we have various models. For example, if you talk about in-line sensors, we run metalworking fluids. There are -- most of the time, 95% water, 5% of chemistry. We have got people going there. Our colleagues, they take samples, send it to overlaps, then they e-mail the test result. So it goes via FedEx to our labs, the physical sample, then we send a test result to the customer. We have got today in many systems sensors equipped where we have the know-how and the sensors measure pH, temperature, concentration and nitride, and we have got online sensors all the time. So you can tell the customer, listen, either do nothing or you have to add one additive tank side or the system has a problem on its own, but you have got a constant monitoring and you collect a lot of data. We have a great relationship with DMG Mori, the worldwide machine tool manufacturer. We have a marketing deal with them. We have access to all their customers. Those customers are very much intimidated by metalworking fluids. So they rather adjust the process then the a good running product. But if you can send them online data on an ongoing basis is really good. If you talk about our large customers like OEM and mining, where we supply [indiscernible] in small packs, but we supply bulk oil in trucks. They have holding tanks. Some of them hold their product for 4 weeks. Some of them hold it for one week. And we have got sensors in those tanks to measure the tank filling. So if it goes below, let's say, 1 quarter or 1/3, there can be an automatic reordering point on an agreed price. So those are types of services we look in. Obviously, the ultimate goal we have is with the data to think about business model innovation, where we have also people involved in our company and it's really nice. Last week, we had our -- what we call Fuchs 2025 Road Show. So we started that during COVID, and we have a live roadshow for our 6,000 people, where all of them can participate. The Board has an opening Town Hall meeting and then a couple of presentations during the week in the Q&A session. And last week, we had, for the first time, the Fuchs Innovation Award. So we asked our 60 companies, voluntary program, you can come up with innovation ideas around the area of digitalization and sustainability. They're all really cool ideas. So we elected 3 ideas from the 25. All our employees selected them, and they'll get a so-called scholarship at [indiscernible]. It's close to the Technical University of Munich. So that is really something where we look forward to foster on those ideas, and that's where this whole area is all about around digitalization. Last but not least, is the growth. And on the growth part, I think you have told us since many years, you don't give us a long-term view. And very often, we were sitting with you and some of you -- I had the impression you only work on your models and on your systems, but fundamentally, when we started Fuchs 2025 at the beginning of 2019, 2019 was the first year of 4 years volatility year. 2019 was the year of the Chinese-U.S. trade conflict. 2020, we had COVID coming up. And then we told you, well, we strive for 15%, and then we had all kinds of things happening in the external market, and we never provided you a figure. We have worked on very, very hard with our entire team on the 2025 strategy. So we have an entire bottom-up planning around our large regions and around our divisions and segmentations. And they come to an EBIT target we have got internally, but also with you now of EUR 500 million in the year 2025. Obviously, the 15% is still a goal. With the current inflation, we're not going to hit that goal this year or next year or the year after because we have last year a raw material increase of 30%. There's another increase coming up in the same magnitude this year. So if you have an inflation of 40%, 50%, you can't dream about making 15%. We need to cover the raw material increase. We need to cover our fixed cost increase. And if we can get a topping on top is nice. 15% is our long-term goal, but at the moment, there are times I have never experienced in my life I must say. We hit our OEM meeting today. Lutz and I made the presentation at 9. I gave them a little P&L lecture because most of the price variation clauses in order to have the raw material cascade in, but not personnel, not the capital employed. I told them about FDA. We had last year EUR 150 million hooked up with inflated inventories inflated receivables for those type of things. Therefore, the 15% remains a long-term goal, but the EUR 500 million is a number we strive for. What you find out in the afternoon is that we expect the largest growth for us coming from existing products in existing markets. We have a system of a decentralized company. So we have very, very strong countries in all the regions all over the world, and we keep them and we incentivize them. And to 99%, that's cool. The 1% is some of them did generally picking. The ones sold more automotive aftermarket, the other one more OEM, the next one more metalworking. So we have some white spots in our map, and that's part of the segmentation where we hired about 12 dedicated segment managers, and they follow a segment throughout the world. Let's say, you go -- for an example, you go to India, and India might be the fifth largest wind market in the world. The MD is not entitled to say, I have no interest in being at the moment because I do please and metal working in aftermark. So this is a part where we hacking and say, listen, wind is big for you, and there is no way around, but we get no pushback. Our MDs, they like when we help them to grow their top and bottom line, and therefore, you will hear much more about our entire segmentation in the end. And I think that's part -- we still look for the electrolytes and other things, but only from the segmented part. We have an enormous potential ahead of us in growing our sales, and our EBIT targets, you also see, like we've told you before, EMEA has continued to develop nicely, but we'll expect an overproportionate profit growth out of Asia and out of the Americas. So that's fundamentally that [ slide ]. Now I mentioned it before. We started with Fuchs 2025 back in 2019, and it's a great program. We call it -- it's a journey, but it's also a transformation program. On the cultural side, we say -- we always say, well, we want to have an open feedback culture and the hierarchy-free communication. We made progress, but it is a journey where I want to run you through. High performance is a big deal for us. On the structural part, we have an organizational setup. So this whole segmentation idea is quite a change for us from a segmentation. We have on the structural side also more people in the holding. We don't want to become a water head, but let's say, for example, 10 years ago, we had finance and legal and tax and HR admin that was fundamentally our holding. Today, we have sustainability with R&D, with product management, but they are asked to work in networks. So our holding functions work, let's say, if you go to purchasing, they work with purchasing in China and the U.S.A. and Brazil in Germany, and they come up with core standards and with core processes. So that's the name of the game behind the system. So it's quite a structural change. But when you do that through the network, always depending on the function head, then you have a great result because there's an automatic buy-in from the companies because they have been involved in the standard setting. That's the basic at the [indiscernible]. And on the strategy part, Dagmar runs you through the numbers later. Obviously, strategy plays a role in many other areas, sustainability, mobility change, et cetera. If you go to the cultural part, we have a vision, which means being first choice for our employees, for our stakeholders, for our customers. When they think about lubrication, we wanted they think about us. Many of you ask me, well, you make acquisitions. Your customers are very loyal. They don't change. All the customers in the B2B technical area, they know us without arrogance here. So if they have a severe technical problem, normally, we get asked. Those are the nicest opportunity. If the customer has a problem with a competitive product and they ask you to come in. If you can help them to solve the problem, might be a quality problem by corrosion. We had with one large OEM in China, a big deal. They had a copper erosion problem, which is also part of e-mobility. So we sent them for the whole recall product just in time. So those type of things when they come to you and you can solve them a problem, it's not so important if your product is 10% or 20% more expensive or double expenses. If you help them solve their problem and help to make their process and their application more efficient, that's what we follow and that's concluded in being first choice. You also know our mission statement and we have established our mission in 2013 as we have established our 5 core values. And the mission statement is lubricants technology people. And lubricants, I told you in my one -- #1 key message. It's a wonderful field to be in. They fulfill much more functional fluid criteria than many people think about, thinking about the regular oil. Technology, very often, I get asked with Liqui Moly or Valvoline, they have a different business model. They are also successful, but they have not too much technology. So they buy an additive cocktail from Lubrizol or [indiscernible], the mix it with the base oil. They put all their money in marketing, and they are more or less in the [ me too ] product. If we want to be in the technical part where we can help our customers a little bit more and that the people partners, the big deal. So you don't see a lot of fluctuation in our companies. Our people are very loyal, and we have a special folks culture, which is really cool. On the other hand, after 90 years now to transform that culture into more processes and more standards, we really look forward to Isabel. We hold her quite a list to move forward. On the digitalization, the performance management part, I think that's really something we want to drive. The values, they start for us with trust, and they end with integrity. And they also have creating value is a value because it's important that our people understand we all have to create values. It is about respect because you need to respect each other, and it's about reliability. And you will hear more about reliability in a moment because in our new purpose, and that's moving your world is our new emotional slogan that was established in 2022. That was a missing link from vision and mission. The purpose of missing for our people and we really like that. I'll show you a movie, but we really talk about unconditional reliability. That's what we want to stand for that we make CFO compromises with our customers when it comes to quality, delivery and so on. That is what we want to go for, and therefore, we have the moving your world. We discuss the -- what. What are we doing? How do we do it? And why do we exist? And in the what part, I think it's a nice summary of what I told you before, technical expertise, leading solutions customer orientation, very important for us. Customer comes at the very forefront and a sustainable attitude. So those are our 4 spot parts to deliver efficient lubrication solutions. The how part is unconditionally reliable. That's how we want to be perceived by our customers. We make CFO compromises and that we do whatever it takes to supply them in time with a high-quality product. And at the moment, you can imagine in times you have scarce availability. We need to change raw materials. We always do that only with the consent of the customer. So we don't change anything behind the scenes or things like this. We tell the customer, we don't have the raw material you need. We can do this for you as the same performance to you be or don't you be, and I think that's the only way forward. And then we come to the why? And Why we exist to keep the world moving, and it's also about moving it forward. And we have a little movie, I think summarizing that pretty well, and I want to show you how it functions. [Presentation]

We're ahead of time. I think we have the flexibility. So I would say, we make the coffee break now. We get the time later on for the other topics and for Q&A. So thanks for your attention. That was the beginning. 6 key messages will come on later again, and see you at the coffee now. Thank you very much. [Break]

So hello to everyone. After the coffee break, we will continue now with some strategy and structure, and I will start before I hand over to Ralph. And the one slide I want to show again and Stefan just also showed it during his first part is really that one, our Fuchs 2025 journey. It's now roughly half time. We started it in end of '18 or beginning of '19, and we are now in the year 2022. And I think if you have been working with Fuchs for quite some time, you have the feeling, oh, it's the same phases. It's the same business model. It's the same company. But what I want to tell you, we are a different company today compared to the last time we met with all of you in 2019 in [indiscernible]. We have really used the last couple of years to push our Fuchs 2025 journey and the various elements that I show on this slide. On strategy, it's really about growing our market share also in our core business based on segmentation and Ralph will give you more details on that. With regards to the culture, it's about establishing a high-performance culture based on hierarchy-free communication and also open feedback. And honestly, if we look back now last 2, 3 years, where travel has been restricted and where we had 2 more in the virtual world, we use that time and also the new virtual format to connect our people. And I think there's a lot of negative elements connected with COVID, but one of the positive elements is that we are now more one global team than we have ever been before. So we have really done great progress. And before COVID, travel was limited also to our leadership teams usually. Now we have like all levels communicate with each other, and that's a big deal for us within Fuchs as we work strongly with global networks and a huge step forward. And with regards to structure, our organization setup is also not the same compared to 3, 4 years ago. Also, you sit here today in the new holding building, but this is not just a new building, this is also really a clear sign and that the role of our holding has changed for more like a lean admin center, which Stefan mentioned before, like in the old days, to really a strong business partner that helps our countries and our regions to grow their business. So massive changes with also a lot of new positions like, for example, our group VP supply chain that helps us to manage our supply chain on a global basis. So lots of changes and a lot of changes to the better. But before I get back to our organizational structure here, one recap on where we are and what our global footprint is. And what you see here on the map, it's like our 57 operating companies and our 35 production locations. So we are where our customers are, and this setup and this global footprint is unique in the lubricant industry. And this setup has been a huge advantage now also during these difficult supply chain times because cross-continental supply chains are heavily disrupted. So already years ago, we started local for local with local manufacturing, whenever possible. We also put in a lot of efforts to develop our 3 main hubs in Germany, in Chicago, in the United States and in Shanghai, where we have state-of-the-art R&D centers and a lot of local support teams that can really drive the market development there. So in a way, now we -- if we look at our customer base, we see a lot of our customers struggle that, for example, move all their manufacturing to China, and they really put all the eggs in one basket. We never did that. In fact, we did the contrary and Fuchs 2025 has helped us to further strengthen our global footprint, and that's for us a key competitive advantage also for the years to come. Now this was part of our dinner conversations yesterday, how do you run Fuchs? And it's not so easy to explain how we run Fuchs because we really use a matrix structure to run the company. On the one side, that's the top part. We have our strong countries and regions, and we have invested a lot in local and regional teams in the last couple of years. And the other dimension is our global sales divisions with our 5 global sales divisions and our global functions, and there, we have also invested a lot in the last couple of years. And in the end, it's about managing the interfaces and that's also where the cultural aspect comes in. So we believe that this is by far the best setup for us, and we also believe that this setup makes us an agile company. We see now that a lot of the big companies that are more centralized, want to go down that path and decentralize because now developments in markets are different, requirements are changing fast so you need to react fast. If you are a centralized company, this is very difficult to manage. If you're a company like Fuchs, that's a key advantage. So we are fast and that's also what we hear from people that joined us recently. They said, the biggest change for them is our speed, our fast decision-making and our entrepreneurial spirit. So really, the core of our business model is customer focused. We want to be where our customers are, we want to understand their requirements, and we want to supply them unconditionally reliable with the right product at the right time. And I think that's where this setup really kicks in and where we see massive advantages. The other point that's a focus area for us. If you are decentralized or if you give a lot of freedom to your local entities, it might also be that as local egoism, right? So people say, "Hey, I do this, it's best for me, although it's maybe not best for the group." And that we want to tackle by promoting a principle called ACT GLOBAL. ACT GLOBAL means acting in the best interest of the FUCHS Group, which means, for example, if we want to go for a customer globally, we cannot have a country say no, and say, "Oh, I'm not interested. I focus on something else." Once we are identified, this is a customer global relevance, we need that buy-in from everyone around the world and help us to concur this customer. And this is a lot of the work that we have done during FUCHS2025, really aligning strategies, also putting us in a position the first time in FUCHS history to run global promotions and to tackle segments on a global basis, to learn faster from each other, to create an expert network around the world that helps us to accelerate our growth in market share. It's really very important change, and I cannot stress that often enough how much we'll benefit from that in the years to come. And then in the end, managing the interfaces is about culture. It's about being honest with each other and helping each other to improve. And that's why we have introduced training programs and also formats that allow our employees to give us feedback. On the one hand, we want critical feedback to improve. On the other hand, we are also pushing for positive feedback because to be quite honest or during these times where our people have to work at least twice as hard to get that job done. It also feels pretty good if you colleague tells you. "Hey, thank you. You have done a great job for us." And that culture of appreciation goes through all levels. So when we go and we visit our subsidiaries around the world, we shake the hands of our forklift drivers. We go and talk to our people on the shop floor because that's our backbone. And that's the culture we want to further push and we want to keep in the FUCHS well, and that's also what we say as part of our FUCHS DNA. And the other part is hierarchy-free communication. Speed matters more than ever before. It's not big that we fall. It's really fast that [ bit slow ]. And that requires hierarchy-free communication. What we don't want to have is that the communication goes up the ladder and down the ladder. We want that direct communication between our colleagues. And again, with the virtual formats we have now, we see that more and more, and it has become a natural habit. And our HR teams around the world are working hard and further promoting that culture and also kicking our people the freedom to act independently in the best interest of the FUCHS Group. So that was my start. And with this, I hand over to Ralph, who will now talk to you about our segmentation approach in more detail.

Yes. Thank you, Timo. The mic was working? Okay. Thanks, Timo. I would like to come back first to the one chart of Timo, where he was showing the organizational setup of our company. In the regions, the world regions and the global function. But it's [indiscernible] only global function but also about global sales divisions. And the global sales division is, for us, a very important organization then in order to look at our global business and to also push for growth. And we have done that for many, many years to define and to act according to global divisions. And you can see the global divisions on the left side, which are 5 of them. The automotive aftermarket, our OEM division, the mining, the industrial and specialty business. Now in our FUCHS2025 journey and our strategy how to further grow the business, we put a much higher focus on the segmentation of our market. So we have identified now and we find more than 200 so-called market segments, and we have allocated all our existing business into these market segments, which means that we look at our business now in a different and new dimension, first of all, and that remains a very important element according to our regional setup, but more and more, we look also from a market segment point of view. And in our FUCHS2025 strategy, we have identified now roughly 20 so-called global business segments, of which, and for them, we have employed some 12 global business segment managers. And these are the segments where we believe there is the highest growth potential for us from a global point of view. That's what we have done. And what are these global segment managers doing? They are the owner of the strategy for the respective segment. They identify our target markets and the target customer groups we want to go for. And together with the local teams and the regional teams, they define their priorities. And that's coming back, for the example of wind industry in India. I mean, this is not really a matter of discussion. This is just a matter of defining how we do it, not whether we do it. And on the next chart, you see an example on the Specialty division. How does that look like? So the Specialty division for itself consists of many, many different segments. And some of them might be important from a local point of view, from a regional point of view, but 4 of the segments for the Specialty part, we have identified a so-called global market segments. And exactly that is the way we do it also in the other divisions to come all together into our 20 market segments. Now when we look at market segments, and I will show you a few examples of them. I think it's very important to say it's all -- these are all segments which -- where we see growth potential, and these are all growing segments. So we have a growing lubricant demand in these segments. And with our approach to these markets, I think there's a huge growth potential for us. And these are segments across the board. It's not only about the new fancy type of segment. It's also our existing business, our traditional business, where we believe we can further grow that is existing markets, existing products and the way how we approach to our business offers a huge growth potential for us. So the first example I would like to have a look is really a global market, which is the wind industry. On the right side of this chart, you see that the market is further growing. But what we do is we have a very holistic approach to that. So we don't only go for the one specific application where we might have a product which is outperforming. Our holistic approach would suggest that we want to act as a full solution provider for all the segments, supplying all the lubricants, which are relevant for the wind industry, which is the oil for the gearbox, which is the grease for the high torque, which might also be a cleaner for the electronic components in the wind turbine. So all of that, I think, is our approach where we believe that we have the right product portfolio, we have the local teams and we have the global strategy how to further grow. And in the segment of wind, for example, it's not only supplying the product. It's also about the online monitoring of the lubricant in use. It's also about service elements. So that remains or will be a much more important element of our business than it is today. Another one is also on the specialty side. It's the food industry. And food industry for us is now really -- a focus on the industry. It's not only talking about the food-grade products where we do have a very comprehensive product portfolio, where we have the approval. So we have the right Halal, Kosher and food trade product range. It's also to understand the entire food plant, the food processing plant and with our local teams and our global support, we go there, we do plant surveys to identify the critical applications where they should use food-grade products, but to also talk about the their general lubricant demand where we also can offer solutions and more and more also due to the risk exposure in a food plant. Our customers tend to also use food-grade products for noncritical application, which is a huge potential for us. Think about a forklift which is running around in a warehouse of a bottling plant. So they want to avoid any contact of a mineral oil with this food. And therefore, it's also more and more tendency there that our food-based products are used for quite regular applications. And you see on the left side, some of our industries, we are looking at, which is the beverage and brewing industry, but also animal food. I mean, in the packaging industry. So there are many, many markets we can go for. Another fascinating example for us is a field or a market segment where this global focus is pretty new to us, which are the rotary motion. So we talk about compressors, gas turbines, industrial beer boxes. I think we are well known supplier for these products. And now having a global approach to these markets will allow us also to further grow. Now taking an example for -- another example for the industrial market. I think that's a pretty new one. It's the growing industry in the car manufacturing, which means that battery cell manufacturers. So that is connected to the e-mobility. We expect a very, very strong increase of demand for this production process and to manufacture these cans where you put in the battery requires a lot of lubricants requires a lot of forming lubricants, but also cleaners. And we do have that product portfolio, and we have now set up a global strategy, how to attack and to gain customers. And we have very nice first successes to supply these industrial products, which is connected to the e-mobility, which is a new market and a growing market where we want to focus on. And I think it's might not come as a surprise that we do see on the industrial lubricants side, they are a big growth potential. Now we have seen some examples on the specialty side, on the industrial side, but also in our -- typically in our [ bread and butter business ], for example, the automotive aftermarket, there's also a nice growth market, and this is connected to the first increasing number of automatic gearboxes and also the automotive gearboxes they need maintenance, and they do not only need the product to maintain the gearbox. They also need devices to flush. So here, we go for a combination of product supply on the one side, we supply a device in order to flush the gearbox and to refill the gearbox. And we are talking about a segment, which is called workshops and now we are talking automotive workshops, automotive aftermarket business. And that is a great tool to sell our product and to gain customer loyalty because once you have your equipment at the workshop and they use your product. I think the customer enjoys working with us. And that's globally speaking, an element we would like also to grow. And last but not least, I think also for our OEM division, you know that we are a very known supplier to the car industry when it comes to -- sorry, Dagmar. When it comes to gear oils, first the gear oils. And now connected to the e-mobility, there's also a demand of transmission oil so-called EDF, Electric Drive Fluids. And there is a pretty -- there's a high similarity to our today's OEM business. So there are huge technical requirements. You see on the right side what such a product should do and can do. And we -- we have, with our BluEV Technology. We are, again, a partner for this industry in order also to supply first fill products connected to the E-Drive. And I think that is very important to mention that the gear oils will not disappear even in the e-mobility and the E-Drive. There is still a huge demand for gear oils and a focus on our gearbox manufacturing, the car industry also for that type of first fill product will provide us with a nice growth potential over the next -- over the next years. So these have been a few examples on our way how we go for the segmentation, how we do that, let's say, across the countries, is a global focus and a global leadership by our global -- via our global business segment managers. And there's room to grow. And now I hand over to Dagmar for the next one, which is connected to our digital answers. Thank you.

Yes. Thank you, Ralph, and I hope you listen carefully to him because it's a very important part for our financial targets, but I will talk later about that. Now it's up to me to give you some more details about digitization. Of course, digitization is a megatrend. And since years, we thought about how to deal with it, what to do because digitization is one of the key success factors for a company in the future. And Stefan, you already mentioned it in the beginning, we have started a journey FUCHS Goes Digital. And that's our answer to this megatrend. We took the help of a consultant to get an outside in view. And of course, with FUCHS Goes Digital. We have like, yes, 3 topics we would like to tackle. First of all, of course, it's improving customer experience. The second is that we believe we need to think digital and that we definitely are going to create additional value. And we would like -- or we have the vision that we are being perceived as a front-runner regarding digitization in our lubricant business. So how did we start the journey? What did we do to implement these digitization, these -- we name it a smart solution ecosystem into the FUCHS Group. As I already said, we started with an external consultant. And with that, we looked what do we have today? What do we want to have in the future? And we developed together with our organization with our GMC with a lot of working groups. We developed our strategy -- our FUCHS Goes Digital strategy. And one of the results is a detailed road map, which gives us guidance how to implement, how to go the path forward. And if you look at the chart, of course, there's a lot of things in there. But in the basis, in the center of everything is a customer, the customer needs. And of course, we ask our customers, we listen carefully, worldwide. And we identified 3 major need for the customer, which are important regarding digitization. So it's protection. But protection is not only to maximize equipment life or the availability of machines or tools, protection as well in more in a holistic view about protection of health, protection of environment. The second need or major need for the customers, optimization. So our customers, of course, want to maximize their performance and to maximize output to increase quality and of course, minimize input. But talking about optimization, we as well not only look at a product, but we have to process in mind. So it's a combination of process management and product. The third major need, of course, if you look at financials are always savings. And savings are very important, not only measuring like reduction of costs or maintenance, but as well savings in the use of resources. So here, again, sustainability comes into place because we want to operate sustainable. And therefore, for us, it's very important to reduce all the input, the resources because resources are not therefore free. Let me give you some examples, what kind of digital solutions we already have in place or where we are working on, what we want to implement in the whole group. And these, of course, based on our technology, in combination with our experience. So if you see on the right side of the chart, there for solutions named. Let me start with the FluidAnalyzer. The FluidAnalyzer as well as a FluidMeter. They are a bit more -- they are both at the same basis. They are our tender devices for the on-site analysis of the condition of lubricants. And the FluidAnalyzer, there are tenders in the place in the machines. The FluidMeter on the other hand, is a handheld device. That is more for smaller setups where you have a lot of small tanks and where it's much easier to have a handheld device to optimize your measurement, your conditioning monitoring of the lubricants. And of course, that is a great relief for the people working on that site, that they don't have to carry a lot of manual equipment, have to do a lot of manual documentation. So it's a big advantage. And what both solutions have in common is that they have the same basis, the same idea. It's about -- yes, is the -- or give more support to the people working on this site. Coming to a more comprehensive example is if you connect these things, if you put software into that. So that means you have sensors, you have a software and a platform and everything is connected with each other. That, of course, is something which is a great advantage for our customers because they are able to on time monitor the condition of their lubricants, but not only that, they are as well able to get recommendations when to do a maintenance, or what about somehow inventory management and it gives you a whole inside view about the operation of the lubricants in your company. And the only thing that our customers need to work with that is a device, a browser and of course, an account with folks. So that are just some examples how digitalization works within the FUCHS world, and there are a lot of more of course coming. But digitization is not only something what we -- or the main focus is outside towards the customer. But of course, we are as well digitizing our own organization to be -- to increase efficiency and to be more efficient, and that was a bit part of our -- or it's a well part of our FUCHS Goes Digital journey but I would like to repeat the main focus always is a customer and to improve the customer experience. And with that, I would like to hand over to my colleague Lutz Ackermann.

I'm older, I need 2 devices to come. So I'm going to guide you a little bit through the geo strategy set up we are in. So we have seen nice products, nice product ideas, nice markets. But in which world we are living. This is a different story, and this is a significant change. We have discussed yesterday evening in the break that the changes we are in are significant and with a high probability irreversible. On the one hand, we have seen the experience, the geopolitical impacts of the Zero-Covid-Strategy of China, which is a nightmare. Besides the political disturbance between U.S. and China. We have now the Russian's invasion in the Ukraine, which is a breach of all civilized rules in the world and though Russia will not be back on the scene in a long time. This means raw material that leads to a certain extent markets. We are facing the inflation. It's a significant raw material increase we've seen which I have seen in my career, not to this extent. And this is not, let's say, speculating. This is not coming through, let's say, a little bit and the shortage here and there with a significant structural problem, which increases the raw material and it's see, especially in the petrochemical landscape. We, in parallel, we see the increase in freight and energy and salaries due to the inflation. This is no doubt this will come. And all of that is the company need with shortages and our customers suffering from shortages as well, and there is -- order books are full. The material is not there. All of that is a stop-and-go economy, probably to which extent and how long it takes it's difficult to predict. And we think it's not a time of [ harbor ] year, it's not 1 year, it takes longer. Nevertheless, we have to live in this business environment, and we think we can really perform in this business environment. And looking into the math a little bit where we are in, we have more or less structured world. So the America is, which are living a little bit on their own, the America First idea is still there. And what happens in '24, nobody knows it, but it's their own technology region, their own market and regulatory environment. We have Europe as a separate region with an own regulatory framework, especially in view of sustainability. You are quite very familiar, I think, with the Green Deal activities comes through taxonomy, comes through CSID, comes through the European Green Deal. And if you read the Green Deal, this turns the economy upside down, especially in the -- also circular economy or Europe was changed, raw material price was changed significantly in the structure of the economy and the demand of the customers, especially when it comes to efficiency and sustainability requirements. And then we have the third part of the world. This is China. China going to separate from the world. It was a clear decoupling announcement to say we want to decouple from the world, that we want to work, have the world dependent upon us. At the end of the day, they have their own technology room, and they are really good. So they always say, yes, we are coping and coping, but now they are better getting better and better. Small example, we have special molecules we are using from U.S. companies and European companies, for the higher quality and synthetic ones. So normally, it takes 10 years to develop a unit, to develop the process to put up the units. They have done in 2 years and perfect products. And this goes through the roof. Going so far, the independency is possible, except food. This is a little bit shaded because they are sitting in between, but they are not that important for us. This business, but not in technology region. And the below shadowed region is out of scope for a longer time. So this is the world we live in, and this affects raw material supply chain and the market requirements. So at the end of the day, what is the answer to all of that. This is our 3-hub strategy. This 3-hub strategy means that we are developing these 3 regions to make them -- to give them the ability to serve the markets to work on high level with the market participants. So in Asia Pacific, the positioning is clearly China centered decoupling and they develop their own specifications, they even developed their own engine specifications for the aftermarket and the requirements, local manufacturing, global raw materials, this has given regulatory increasing and increasing. As described, Green Deal, we'll give a significant change in the petrochemical landscape, especially when I'm looking into the e-mobility, reduced fuel demand and the land, the refineries are going to change their slate in manufacture. We need to substitute this biochemicals or recycled material, complete different technologies. They are stable on its own, focusing America First, in which direction they are going regarding e-mobility and regarding new technologies, it's difficult to say. The industry says we need to move into this direction. The politicians are sitting somewhere. So at the end of the day, the next years will show in which direction the United States are going to more. So what's our answer? So on the one hand, we have the fully fledged distribution structure in the world, as [indiscernible]. We have our plans. We have our labs, and we have the 3 big hubs in China, in Europe as an own [ network ] hub. And we have Chicago as an own hub to serve the U.S. markets and probably South America. One I think this may lead to triple or double work to develop things double or triple and to have redundant capacities, we have redundant organizational structures to do the business. This would be the killer. At the end of the day, we need to get our efficiency out of the group. And this is the key element, as Tmall online already out, the networking structure of the FUCHS Group. So I have a long history in industry with Exxon and with Tech Cycle. So I know what matrix means, and I have experienced matrix structures not working. Our matrix structure, our self understanding. This is the most reliant thing I've ever seen in the industry. So we have R&D Key Working Groups. This is the worldwide group of the biggest brains we have for the specific product groups. They really start to work out the formulation backbones and the [ land ] not to do double work, but to guarantee know-how transfer. We have the operations network with standardized processes and units to make things easier, more efficient. The sales divisionalization is lined out by Ralph allows us to transfer business models, sales approaches and to support the segments by each other. And the other one is, of course, this is with people that works with technology people is the most important part. So education evaluation and really alignment with our company culture is the key element, and this only works in the network structure. This gives us the efficiency to run this separated 3 big hub structure. So we combine local presence with global approaches for networks. And this works in a way, which is, I would say, very good for the time being. Could be improved in some pieces in corners, but at the end of the day, the safe understanding of the people working in these networks is already increasing and developing in a way where I can say this is really a good approach and quite unique in industry. So now Dagmar, it's your turn. The long-term financial targets because the result out of this work must be reflected in the financial targets.

Yes. Thank you, Lutz. You're absolutely right. But therefore, I need all of you to manage that and to produce the results. So now you heard a lot about FUCHS2025, a lot about culture, structure and strategy. And with that, I would like to start a little [indiscernible] just to the world to lubricate market before coming to the financial targets. And yes, what's all about it. So as you can see here, the lubricant market, the world market demand is flat or slightly growing. But below the surface, it's different because there is a strong shift towards high-tech lubricants with low volume. And that's our home turf. So our relevant market is growing. And as you can see on the right side of that slide, during the same period of time, we managed to increase our sales quite a lot. Yes, the left side is volume, the right side is sales. But anyhow, it just gives you an impression what you can do with slightly growing market or even with even the shrinking market. If you look a bit deeper into that slide, having a look at the development of Europe, EMEA or where the market share of the world market demand, yes, decreased from 36% to 27%. On the other hand, we increased our sales quite a lot. The same accounts for the region America, where there is a decrease in volumes from 35% to 30%. And I mean, the big or bigger growth in the region, Asia Pacific. So now I would like to come to our financial targets. Here, you can see an overview, I'm really happy that we are able to present the financial targets today because we wanted to do it for quite some time ago. But then yes, COVID happened and everything, and we just, of course, postponed. But even today, I mean, the environment is quite uncertain, as you heard from Lutz. So overall, we are still in a very uncertain environment, but anyhow, we are committed to our financial targets. We have 3 financial targets: the first target is about growth, strong organic top line growth, which we like see in a mid-single-digit percentage growth year-by-year. The second target is about profitability. And with profitability, we have -- we see a clear upside potential, and we stick to our long-term EBIT margin of 15%. I'll come later to that in a minute on the next chart. But first, let me talk about cash flow. Cash flow is very important for us, and we have a high cash conversion because that's a center of our business model. And looking at the cash flow, at the cash conversion, we defined a cash conversion rate, which is free cash flow before acquisitions divided by earnings after tax or net profit. Our target there is an average cash conversion of 0.8x year-by-year. So why is it not 1x? Because we are looking -- if you look to the left side, we want to grow. And if you grow you need, of course, to build up net operating working capital and to invest and therefore, your cash conversion can't be 1x. Next slide you already know from Stefan. But let me talk a bit deeper or a bit longer about that. Our 15% EBIT margin target is a long-term margin target. And of course, we are not able to reach at this year or next year. And I would say, yes, it will be hard or not even the year after. So for the year 2025, we said we look at an absolute number of EBIT, and our target is to deliver EUR 500 million in 2025. And each region will contribute to that. Asia Pacific with the highest contribution, North and South America following and Ralph don't you get a bit of a challenge maybe to uplift your contribution. Okay. Thank you. And it's challenging. But with FUCHS2025, we are well prepared for that. And we will see how it works. What are our growth drivers? You can see here some remarks for the regions, but you already heard a lot about -- from Ralph about examples about the focus on market segments. We gave you examples about our market segments, wind, food industry, rotary motion, battery production as well as gearboxes for the Automotive Aftermarket and of course, for the OEM and EDF fluids. So there are lots of examples, and you find it from here, more or less all industries, and that's one of our core growth drivers, which goes across all regions. So every region is focusing on penetrating the market much better and to grow. That's an integral part of our FUCHS2025 strategy. In EMEA, they have as well a focus on supply chain and logistical excellence to increase profitability. Of course, in the other regions, they do it as well. But the main focus here is in the region EMEA because it's the most complex region with the highest number of companies, the highest number of countries. And this, of course, gives just much more room for improvement. But as you already heard, we are working in a matrix structure. We have a lot of networks. And of course, we are exchanging best practice and ACT GLOBAL. So we try to identify the best practice and then, of course, to accelerate that in the whole group. If you come back to top-line growth. In the last 10 years in the group, our CAGR, our growth was on average 5%. You might think our target mid-single-digit percentage target on an average is they're not very ambitious. But the history includes acquisitions. So if I would just deduct acquisitions, we are talking about roughly the 3% CAGR for this period of time. So our mid-single-digit percentage growth year-by-year is quite a target and a challenge. As you can see on this chart, we have different attitude of growth in the regions. In Europe, we had the highest growth with 5% -- no, sorry, we had the highest growth of 6% in Asia Pacific. Europe with 5% and America with 4%, but that's -- yes, as I said before, includes as well acquisitions. And looking forward, -- as already mentioned, we expect the highest growth in Asia Pacific, followed by Americas and then Europe. There's one thing I really want to point out, and that is the inflation we have and the raw material prices. Because the inflation in raw material prices and, of course, the other cost inflation, which we pass through to our customers with some time lag is impacting our sales and that you really have to bear in mind. And if you look, for instance, for the year '21, if I compare our prices in December '21 with our prices 1 year before December 2020. Our selling prices are up by 20%. But of course, even if you showed the top line growth of over 20% in the year '21, that doesn't reflect all the impact of increasing our selling prices because our growth in '21 was dominated by volume. And the same somehow will be -- will impact the year '22 because we see somehow a similar development as we still have increasing raw material prices, increasing inflation. And therefore, our target of the top line doesn't reflect these inflation. As of 2023, we hope that we are in a normal environment again. And then, of course, see that target reached. Coming back to profitability to our EBIT figure, our EUR 500 million in 2025. You see here a really long-term development starting in 2004. You have the crisis, financial crisis, 2008, 2009. It's just a little dip as we are not -- or we didn't make any losses. We have the downturn in 2019 from the geopolitical crisis, 2020, we had the hit of COVID '21, we increased our earnings again. And as you can see that for the year, our target reflects a higher growth potential compared with the last 10 years. So based on our strategy, FUCHS2025 of course, in combination with the outcome of our investment program, which we did in the years 2016 to 2020, we want to achieve this EUR 500 million EBIT target in 2025. We have backed this all with a very solid balance sheet structure. Here, you can see our equity ratio of the Group, which is since the year 2012, above 70%. And this gives us a strong stability even in uncertain times. But of course, I don't want to increase the equity ratio year-by-year that's not the target. It just gives us stability and the flexibility to follow our strategy. And of course, we want to give back value to our shareholders. And with that, I would like to just make some statements regarding M&A because our financial targets don't include M&A because we are not -- we don't know when we are able to make an acquisition or not, it's a question of availability, but we are open for M&A. It's an integral part of our strategy to look for nice M&A targets and we have set our -- a framework about what we are looking for and what it should be. So we are looking for transactions. And hopefully, if we are able to do some, we would even accelerate the growth. Here, you can see a chart because we often get a question, is FUCHS a cyclical company? What about how do we perform if there are cyclical times. And here, you can see that we acquired even in volatile times, quite -- that we have acquired a good development and really a robust structure and this reflects our business model. Our business model, which is, yes, all about lubrication, about technology, about people. And of course, this is a reflection of our organization. You heard a lot about that from Timo how we work, how our daily work is, and this all, of course, is part of the outcome or the outflow of this development. Having a look at the cash conversion, our cash conversion rate. Here, you can see the historic development for the last 10 years of our net profits and the cash conversion rate. And our target, looking in the future is 0.8. In the year 2021, our cash conversion rate was 0.35, so far below but of course, we had a huge negative impact in our free cash flow due to this massive buildup of net operating working capital. And we expect, of course, that this will normalize in the next years. Hopefully, inflation will normalize, will go away. We are -- yes, we will keep the CapEx on the D&A level because our investment program is finished and -- as I said before, this target of 0.8 of the cash conversion rate, that is reflecting the growth, which we expect and which we want to deliver. In the history of these, yes, cash conversion rate, you have the impact of our CapEx program, you have the impact of funding some pensions and everything. And in the history, the average was a bit above 0.7. I would like to talk a bit about our dividend policy. We are upgrading our dividend policy after quite some time. Since 20 years, we have increased our dividend year by year. And with that, if you manage to do it 5 years further, we will be a dividend aristocrat. So with our upgraded dividend policy, I think that's done because in former times, we said -- at least, we will pay the dividend we paid the year before. We intend to increase it. And now we are going to increase the dividend. So that's what we understand our under upgrading the dividend policy and that's a commitment for us as well to you, to our shareholders and reflect all these commitments because we would like to participate on our profits. Last week, we announced a share buyback program. And that's another commitment to you because we want to give back some value to you. And of course, it's on the other hand, a signal that we think that the current share price does not reflect the fair value of the Fuchs shares. We are going to buy back 200 million shares -- about 200 million shares with the -- we are going to buy back shares in the amount of EUR 200 million, sorry, not 200 million shares. So it's [ EUR 3 million ] of each share class preference shares and ordinary shares, and the program started yesterday. The shares will be canceled once we've done it. And what I want to point out is that it will be not a limitation in our ambition to grow and that it will not hinder us in our potential to do M&A or to look for targets further acquisitions. And of course, it's backed by our free cash flow, and we might use some bank loans for short term but our free cash flow generation. That's one of the key success factors for our business. And as you can see here on that chart, it's like a free cash flow of the last 10 years and what we did with that. So we generated the last 10 years, EUR 1.8 billion free cash flow. And out of that, we paid up to close to 70% to our shareholders as dividends. There was a share buyback program included in the years 2013, 2014. And so it's even more what we paid back to our shareholders. And of course, the cash generation in the future will be even more if our business model is working out. And of course, if we take all the chances we have regarding sustainability regarding mobility transition, what you will hear after the lunch break, which shows a great potential which is out there, and we just have to grab to deliver. This slide somehow sums it up, what I said before. Our CapEx is expected to stay on the depreciation level. Acquisitions are an integral part of our strategy. And of course, we have to focus on the return to shareholders with dividend and of course, if it might be opportunistic share buyback program. And with that, I would just like to, yes, show you again our financial targets because yes, the full management is committed to these targets. And it's the first time that we published targets, midterm targets and as I elaborated before, growth, profitability and cash flow are the main drivers of our business. And therefore, I'm really happy to present that to you. And yes, here again, you see our 2025 EBIT target of EUR 500 million. And yes, I hope to make it -- and with that, -- we are a bit before time, but it's more or less, I think, ready for lunch. [Break]

Welcome back from the lunch break. I was afraid that I'm losing the game against Sunshine and barbecue, but thanks for coming back. So lunch break is over. And now we come to our sustainability activities. Sustainability at FUCHS is a long story. And our basic understanding of sustainability is, of course, the 3 pillars. We are living in the economical part in the social part let's focus on safety, corporate citizenship and compliance with human rights. I mean, this is a safe understanding. And the ecological part, that means the efficiency, environmental friendly do not mix it up to biological degradable. This has nothing to do with environmental friendly means products with raw materials -- containing raw materials, which do not harm the environment and do not harm the biodiversity. And of course, a reduction of CO2 emissions of better the greenhouse gas emissions. So it's a little bit a mix up. So the greenhouse gas emissions is -- we always see the 37 million tons CO2 emissions. This is one part. Basically, it's 50 giga tons, 37 CO2, 7 greenhouse gas like [indiscernible] and nitrogen oxide. Plus LULUCF that means land use, land-use change, and forestry. So at the end of the day, this is the world we live in. And our target is at least to move our company into a more sustainable world, in a sustainable management in a sustainable economical environment, including circular approach. This is supported by the Green Deal. Everybody is more or less familiar with the Green Deal in Europe, which really focuses on sustainable by design, sustainable chemistry. And of course, at the final and a full circular approach that means fully independent on existing raw material imports and, of course, being climate neutral. This is the target. At the end, looking into the ecological development at FUCHS, what we are doing is first of all, we are looking into our own environment, which we call Gate-to-Gate. That means design, R&D and manufacturing. This is our world where we live in and this is which we can directly influence to reduce CO2 footprint called Gate-to-Gate, and we are CO2 neutral since 2020 in using renewable energies, reduction of waste and partly the non-content table is due to climate protection projects and compensation. For example, the CO2 emission generated by [indiscernible]. So we cannot change the emissions of an airplane. And if our people are going to travel we are committing CO2 part of -- this part of the composition. The other piece we are heading is the raw material side, exploitation, refining, processing and manufacturing of our raw materials. This is the field of refinery, this is a field of chemical industry where we are working with our suppliers to get CO2-neutral products. So through their change of manufacturing, change of molecules, different suppliers with different processes. At the end of the day, one we even need probably to compensate. It depends a little bit, the chemical industry is far away from being CO2-neutral far away. So there is finally gas, oil, heating, energy, gas turbines and the primary feed for the -- for the process is fossil oil if changes, but it will not change in 2 years, in 3 years, it will change probably in 5 to 10 years. And the only exit for us may be to lose biochemical processes to generate molecules that we can use. We are working on it, we'll come later to it. But this is a problem with a scale up, small volumes yes, big volumes no. But at the end of the day, the important piece is the whole oil value chain. We are looking at Cradle-to-Cradle. That means exploration -- exploration is a little bit too much. That's a raw material supply, design and manufacturing then the usage phase is an important piece that we can contribute a lot in reduces the CO2 footprint of our customers due to efficiency gains. Then the end of life, how to handle the end of life thing. This is the key element because there the story do not end. But at the end of the day, the key element is to get from here back to there. And this, you call re-refining processes, reprocessing whatever we may call it about. And this is the typical way of circular economy. And to make things circular, that means we are talking about design and R&D. And there, the European Union says, we need at least finally a director per se sustainability by design. That means you need to develop product which you can repair, not to sold away. We cannot repair our products, but we can formulate our products on a base which is recyclable. And these are the work we are in. And at the end of the day, the way to a CO2-neutral, climate neutral, circular approach is the long way. And the European Union says 2050, [indiscernible] Is it a reality? I don't know. Under these circumstances, we are definitely not. Today, it's just to survive. Independently, what happens, so coal and the open, industry needs to run. This takes a while until probably this materializes, but we try to develop methods and projects to come to this and to reach this target. The key element for our products independently from raw materials is that we enable our product, our customers as a solution provider for their applications and especially when it comes to the operation, it helps a lot to be more efficient. Efficiency gain is the most prominent target in development specification, specification of products to improve the efficiency of the use -- within the use phase to have the customer to develop and to save CO2 emission. And self understanding we have is that we empower our customers to perform more sustainable in using specific raw materials and providing an efficient solution and providing the solution, which gives energy efficiency and which provides a solution which makes it not too difficult for the customer to reuse lose material. We have projects ongoing where we recycle on site and to make it reusable for the customer when it comes from [indiscernible] All of that, this is an important piece for the industry empowering the customer to run their businesses and their applications on a more sustainable base. We have one example. It's a quite prominent one. This is a normal shovel using the hydraulic system, which turns the body and moves the shovel. And at the end of the day, everybody says hydraulic oil is hydraulic oil. It transfers energy in fullest. If you talk to the universities, especially the hydraulic once they say it does not depend too much of the efficiency of the fluid. What is the efficiency of the fuel of hydraulic, the internal friction over the years. This is the proof. We use the product which has very special molecules in, which from the original carbon footprint are not that good like the standard product. So everybody would say, low carbon footprint for the standard product, I would prefer the low-carbon solution. But since the high-quality solution is much more efficient, the efficiency within the use phase bring savings of roughly 30 tons of CO2 due to reduced diesel demand. And this shows that we need to look into the whole life cycle of the product to a fine compensate and look into it, what are the savings and what are the efficiency gains is only one, a small one. We have thousands of them working in Europe, in Germany, in Europe, they are bigger ones. So the savings even to a simple hydraulic oil change in formulation. It's quite simple for us. We need to know what to do. But at the end of the day, it brings the savings into this [indiscernible] for the customer it's a significant CO2 reduction. And if this customer works for an OEM, he needs to prove towards the OEM. What is this footprint and he is going to put up a very poor example. And all of that helps us to bring the sustainability idea into industry and really to look into the whole value chain where we are working in. So the sustainability journey of Fuchs is a long trip, a long journey because sustainability basically is not a piece of paper. It's not a colorful presentation. It's a real doing. It's a saving. It's a change in mindset. And this especially in Europe, will take a little bit time really for the economy to understand and to really do what needs to be done to change the economy and a sustainable economy. For the time being, to take the same car, just to [indiscernible] winner save the world. So there is probably more to be done and at the end of the day, since 2021, including all affiliates in JVs, we are CO2-neutral. The production volume from 2010 to '21 increased by 50%. And the specific waste generation has been reduced by 7%. At the end of the day, our emission is 140,000 tons. 140,000 tons, sounds a lot is nothing. So comparison, Germany in itself is 1,000 megatons. So it's 0.1 mega ton. So this is our share in Germany. It's 0.1%. We have 1.7 megawatt peak in own solar power and green electricity 52% moving forward in all plants in the world. And at least for the unavoidable CO2, which we cannot avoid due to travel trips cars, whatever you're using, we need certification and the certificates we are using are not something to buy CO2 certificates. These are real projects in the world of water power or other projects where we really invest into projects where we -- where people generate energy CO2-neutral. But at the end of the day, it's a success, and this is throughout the whole FUCHS Group, not only in Europe, so all the whole FUCHS Group and this is an important piece of our self-understanding that the whole Group and the people within the FUCHS Group do understand the sustainability is not only limited to Europe and some crazy European ideas, but it's really an essential way forward to save what we have to save partly the future of the next generations. The final target, the final target we have is that we are going to become Gate-to-Gate neutral 2025. So that means we have projects with our suppliers, is refiners end to end. You can imagine a 40 million-ton [indiscernible] refinery cannot be done -- cannot be set carbon neutral. This is impossible. But what you can do is to use recycled base oils, biochemical methods, renewable raw materials to reduce the CO2 footprint and the suppliers are going to invest into optimization of their processes to reduce their CO2 footprint. I think we are quite confident that we, by to a major extent, can we get Cradle-to-Gate neutral in 2025 and partly with this compensation to which extent needs to be seen. And in 2040, we think we can manage to get net-zero. Net-zero means that our whole process is from Cradle-to-Cradle CO2-neutral that means even the waste handling and the repeat of the waste into processes to generate new and upsized material is the target. And that means through conversion of renewables, CO2-neutral raw materials and packaging, energy supply, energy management and waste elimination. Waste elimination is important for our plants, and it's important for our customers, especially in regions which are a little bit not so developed. Leake oil and these sort of things are a significant part of the cost. And there we can sell a significant amount of CO2 generating waste. At the end of the day, 2040 is ambitious. It depends a little bit. If the world is going to change more drastically than the change today, then it's not a target anymore. But for the time being, assuming that this craziness disappears a little bit out of our world, then probably it is positive. The key element is that we need to have the supporting structures in R&D, which we are developing now. Groups for backwards integration. Backwards integration means that we are using biochemical methods to generate the molecules we need to have. And at the end of the day, to find partners to recycle used oil into a valuable product, recycled waste oil is existing in Germany, but the recyclers are probably recycling, and they are not providing high-quality products. At the end of the day, they have the technology and the knowledge to provide high-quality products. But for the time being, the willingness is not there. And this is the work we are in today to say, find, we need to find an industrial solution to get recycled waste oils, which are recycled in an efficient way, carbon neutral and giving the quality we need to supply the market with high-end products. And this happens in Germany. This happens in Italy. This happens in the U.S. The circular economy, just to give you an overview of what's really the 3 principles. The prioritization of renewable feeds, renewable means that comes out of biochemical or photochemical processes and not competing with food. The craziness in implanting grapeseed and feeding it into fuel oil probably is not so hot for the time being. And this should not take place. And we have a lot of processes on the industrial scale, which are using palm oils. This is not an option because palm oil in the long end or on the short end destroys the natural habitat and the biodiversity, this is a nightmare for nature. So far, these molecules we cannot use. Molecules are available out of renewable material or organic waste, real organic waste. This is in process and probably in 5 to 8 years, we have higher volumes available with our partners we are working with. The maximization of product utilization is the other piece to prolong the lifetime of the product, prolong the lifetime and when we say the volume is going down because the lifetime is longer, changing the oil is longer. But at the end of the day, that means higher added value for the customer. And we are not selling a product. It must be understood even for us. We are not selling a product. We are selling a solution to the customer with an added value. And this added value is reflected in the pricing and the margin, definitely, supported by IR supported by sensors supported by [indiscernible], all things being equal, the maximizing of product utilization, there are a lot of projects going on where we extend the lifetime by on-site reiterations by online monitoring and variable oil change in device or by rearticulation after the use phase. This all is a package. The customer gets not in EUR 1.50 for the new oil, he gets 8,000 hours lifetime. This is the key element for our sales understanding, which fits exactly into our abilities we have who offers a solution for the customer. And this is true for a lot of deals. And for example, metal processing oil. If you have metal processing oils or you have seen it in new companies you are covering partly. They have metal processing oils, they need to maintain the metal processing oil, they have to buy the metal processing oil, they have to buy the tools. They have to grow the holes and so on and forth. What they want is they want to drill a hole. And what we offer is you can drill 10,000 holes with this setup. And this is what the customer wants. And this brings us the efficiency the customer needs. So this is a win-win situation. And to recover the used products in waste, as already explained, this is recycling or burning, which is net raw material and to reduce the waste or to upcycle on-site the waste product, then we can probably close the loop and we reach CO2 -- net-zero, C02-neutral, provided better trucks [indiscernible] provided that the energy they get heat is CO2-neutral generated and so on the fourth, it's a longer way. But at the end of the day, we have already the right solutions for this field. We are on the way in this field. And here, it takes a little bit more time with a circular approach to close the loop, but we are convinced that we can manage it in 2040 really to get a net-zero approach for our company. And looking into our activities in the industry, this is the key element. We cannot do it alone. You need partners. You need a specific self-understanding and all what you do in each and every step, all what you do you need the reference, always a standard where you measure against. And sustainability is a nice word. But it's not quantified. One who says, "Yes, I'm acting sustainable well, what the hell does it mean, 10, 8, 5, 6, this must be the answer. The answer to everything is 42. So at the end of the day, standardization measure and set the boundaries of the CO2 evaluation is the key to convert industry in a real sustainable industry in doing and finding the right direction. And what we are doing in power industry environment is that within the European framework, we have set up working groups, especially defining this sort of cycle with the refiners with the chemical industry, the BASF and [indiscernible] of the world with our lubricants partners and competitors and, of course, the refiners, which is organized in a specific setup is a large working group and it works to an extent where I would say, yes, they have all the same target. And at the end of the day, we can over to the end of the year, I think, a real good program, which we can offer to the public to the customers, to our suppliers to say find business standard, please measure against the standard then we have quantified target gains and to say next year is a real net-zero and not [indiscernible] This is one piece. The other piece is social sustainability at FUCHS. Social sustainability is -- this is our heartbeat. If you look into our company, into our self understanding how the company develops, the familiarity of the company is reflected in the safe understanding of all our employees. And the employees say, fine, we are on our own supporting projects for against Zero Hunger, giving quality and education, Sustainable Cities and Communities, especially Good Health and Well Being, No Poverty. These are the projects, the SDG goals, which where we pay in. If you count it, you count 159 projects. The real number of projects is 151 because we have some projects counting in for 2 SDG goals. At the end of the day, we have 44 projects, 22% counting into sustainable goals, which are not part of our target goals so far. The left ones are the important ones. And this is nice to see. It's coming out of the organization of FUCHS to say, fine, we are willing to support we have a social responsibility. And so far, we take this responsibility and do something wherever we can. The sustainability ratings and rankings. Especially here in the different rating things, CDP, ISS, MSCI, EcoVadis. They take the ratings say fine, this is the knowledge we have got from the companies out of publications in not applying standards. So partly, these ratings are a little bit poisoned by nonexisting standards, but let's say, more or less rough evaluations. So we have seen significant improvements because not we improved our behavior, but we improved our reporting. And so far, this is not by an increase in the rating or in better rating. The one with the CDP, this is the most [indiscernible], you need to put in really CO2 emissions step-by-step in each and every corner of the company. This shows, I think, gives the best overlook, but CDP is demanding exercise, maybe it's a lot of capacity to fill out the number of questions. At the end of the day, all overall, depending upon the type of rating, the type of format we are reporting in or where we evaluated shows an increase. And more and more on step-by-step, I think we come to grips that we get the full transparency into the public especially when it comes to the -- to everybody known there is standardization. So we are now nearby the [indiscernible] standards. And I think within the next 2 to 3 years, we fulfill the full GRI standard. Coming to the other aspects. So what does sustainability mean? Sustainability means at the end of the day, to guarantee and not to use irreversible resources and not to damage habitat, biodiversity and it shows a set of way of living, to keep what we have and to save it for further generation. This all needs to be reflected to the outside. And the reflection to the outside is on the one hand, and no corporate name Petro Lube. Lube is okay. Petro is an ointment. Everybody says, Petro, they're dealing with heating oil and this and that in -- this is our problem per se. Everybody thinks we are dealing with heating oil per se, there's a little bit of lubrication behind. We are functionally fully providing solution to customers without us, the German industry, what happens standstill. Independently, what you are, and you have heard it in mechanical, medical, wherever you can think about it, has nothing to do with heating oil, nothing to do with some base oils. It's -- we are using molecules. And I'm really have not interest where it comes from. It needs to be sustainable. It needs to be a carbon plan and then we use it. And we are looking for different sources of this carbon change. And so far, Petro is a misleading name. And so far, we think, okay, probably it's better to move away from this petro access and say, we are FUCHS SE. FUCHS SE providing solutions as explained, and FUCHS reflects the self understanding of the company, a family-owned company with a character, which really drives the culture of the company and makes the success we have had in the past and which we will have in the Q2. The variable compensation is sits with the FVA and the performance factor and the individual share. This is explained in extent already expecting the performance sector, this is probably a thing which one may link to a certain extent to sustainability things, but this needs to be discussed at a later stage, the import part, we said the intention is really to go away from the petro and to show to the public even though the name that we have nothing to do with heating oil and benzene that we have to do something with high tech and high technology. So this was the -- we say, and now I will show you a short video about our sustainability efforts and how we understand sustainability. This gives an impression and I think it's a very nice impression what we do think about sustainability and what our view is on sustainability. [Presentation]

That's it. Thank you very much for listening, and thank you very much for your attendance.

All right. I think we are complete. So let's move on to the next session. The next session done by Ralph and myself is an exciting one. It's about the mobility transition. And when we put the presentation together, we thought the best thing to kick off that session is to start with the market trend analysis to show you where the lubricant market, the automotive lubricant market is heading based on the technology changes we see in the marketplace. So the first slide shows by region where new vehicle sales, passenger cars and light vehicles will be most likely the 2040. So an outlook over the next 18 years. And the first finding on that slide is that if you compare the 3 regions, Europe, U.S. and China, that new vehicle sales in China will be bigger with EUR 35 million per year, than Europe and the United States combined. So that's the first big finding we have on that slide, really massive growth in China. In 2021, China had new vehicle sales, passenger cars, light vehicles of around 26 million. So that's an additional 9 million vehicles per year. There's a couple of assumptions in that outlook. So it's also an assumption that China does not limit or cap new vehicle sales for passenger cars and light vehicles, but that's a massive growth over there. The second message on that slide is that we really need to look at different regions because technology will develop differently. On the left side, you have Europe. In Europe, there will be no more combustion engines in new vehicles in the year 2040. So our assumption and this model and these numbers have been generated together with FEV consulting, that's an institute closely associated with the Technical University of Aachen. So that scenario shows that in the year 2040, 74% of the new vehicles sold in Europe will be battery electric vehicles and 26% will be driven by hydrogen with the fuel cell being the dominating concept. So that's really what that model is. There's a couple of assumptions, of course, one assumption is that hydrogen can be manufactured based on renewable energy. Also that the charging infrastructure is there to support this -- so this is all part of that model. If you look at China and the United States, the situation looks quite different. In China, half of the new passenger cars and light vehicles sold will most likely still have a combustion engine. That's on top of the Chinese bar. It's the red and the gray parts as a hybrid concept that still have a combustion engine. In the United States, between 55% and 60% of the vehicles sold will still have a combustion engine. And we only talk about new vehicles, our passenger cars and light vehicles. We now zoom in into Europe. We also see that we talk about a so-called accelerated transformation. That means a lot of the change is happening after the year 2030, the closer we get to the year 2035 or 2040. We also know about the political discussions in Europe about banning the combustion engine starting 2035. So we'll see what will be negotiated with the countries. But really the scenario shows there will be an acceleration starting the year 2030 based also on the emission targets that are out there and on technological reality. Why did I start with passenger cars and also light-duty vehicles because that's the primary target for e-mobility. And we see that with all the customer conversations we have and with all the projects in heavy duty applications and also in stationary engines, the combustion engine will still be there and also why for much longer. And if you talk about stationary engines, so what do I mean? It's, for example, engines that are used in power plants that were natural gas. It's also engines that are used to pump the liquefied gas, which is right now a big discussion in order to supply Europe in future into these vessels. So there will be a lot of stationary engines out there, and this market will also still be growing and a very slow change away from combustion engines. In long-haul and off-road applications, a little more extreme picture, that's where our customers tell us that there will be a long-term future for combustion engines in these applications, so that will remain. So what does that mean for the lubricant demand in China, in the U.S. and Europe? Let's start with China. So the left part, I don't need to explain any more new vehicle sales near 2040, it will be roughly 50-50 between the ones that still have a combustion engine, the ones that don't have a combustion engine anymore. But now for the lubricant demand, the total car population is relevant. So the cars in operation, the cars on the road. And what we see for China is that there will be a massive growth of the car population. The car population today is roughly 300 million cars and it's going to increase to 450 million cars, which means that's an increase of 50% in cars in operation. We also see that in the year 2040, just over 80% of these cars will still have a combustion engine. In other words, the number of combustion engines on the road in China is going to grow tremendously. There is not a market shrinkage over the next 18 years. There is a massive growth in combustion engines. There's also a massive growth in vehicles with no combustion engine, but still the dominating factor is really that. And based on that, we see the automotive lubricant in demand in China are growing, and we see it growing substantially. We think it will be roughly 800 tonnes coming from 3.5 million tonnes today. So will be roughly a 4.3 million tonne market. There will be efficiency gains. So that tempers the growth a little bit, but it will be 800,000 tons of additional lubricants, automotive lubricants needed in China. Switching to Europe, the picture looks quite different. We see here that -- and I pick the year 2035 because of the political discussions, but will be roughly 25%, 75%. So 25% of the cars will still have a combustion engine of new cars sold 75% not. The total car population is not going to grow, and that's a big difference to China. It will remain roughly at 242 million vehicles in operation and the share of vehicles with a combustion engine in the year 2040 will roughly be 3 quarters. So 74% of the cars will still have a combustion engine. So this is only passenger cars and light-duty vehicles. 50% of the automotive market in Europe is heavy duty, and we think that this market is going to be fairly stable. With this scenario, it's our assumption that the lubricant market in Europe is going to shrink substantially by roughly 700,000 tonnes by the year 2040. This is driven by a stable car population on the roads and by increased share of cars with no combustion engine anymore. What about the United States? In the United States, and I think Lutz mentioned it earlier, path is a little bit unclear where we are heading. We know the big announcements of Tesla and also the Big Three to really go towards electrification. And they will be, for sure, more electric vehicles on the street. At the same time, the U.S. is more similar to China. We'll also see a car population that will be growing. And the much bigger impact in the United States will be efficiency gains. In the U.S., and I'm not sure how many of you on a regular based in the U.S., but you still have people that change their oil, they're engine oil, for example, every 3,000 miles. That's a reality there. So if you tell them in Europe, I don't do that before 2 years or 25,000 kilometers, they don't believe you. So there is long ways to go, and that will actually drive the lubricant demand for automotive lubricants down, but that's nothing new. And Dagmar has shown it before when she showed the global lubricant market, that's just a continuation of what's happening. But what's also happening is that the technology is trending in our direction because we don't sell the oil that's changed every 3,000 miles. We sell the oil that's changed every 20,000, 25,000 or 30,000 miles. So that's really the dominating factor in the U.S. And if we sum that all up, then we see a rapidly growing automotive lubricant demand in China over the next years, and we talk more than 10 years. We see a shrinking demand in Europe, and we see a high-tech demand coming up of higher tech demand coming up in the United States. So that's just a baseline scenario we need to work with. And I think that also delivers some clarification on where the lubricant market is heading. Taking a different perspective on the market and focusing on e-mobility, we are extremely excited about e-mobility and e-mobility applications. Because what we know today is more than what we knew when we met the last time in 2019 in Kaiserslautern. We knew that e-mobility will be coming and maybe also a little faster than people back then thought. But we did not so much -- not know so much about the technology that's needed on the lubricant side. Now we know more, we know that there is a high demand for high-end lubricants and for very specialized applications also on the fluid side. What you see here is some market data that McKinsey published in 2020. And it's about the market size for fluids, for electric [ driveline ] fluids, EDS and also for thermal fluids. So thermal fluids are used to cool components in the battery electric vehicle, like, for example, to cool the battery, but also to cool other electronic element are much higher than what e-manufacturers thought a couple of years ago. It's specialized applications. It's like very high [ cleanliness ] requirements, very special viscosity requirements. So it's really, in the end, a specialty market, which is very much in favor to our business model. We also know that there will be an aftermarket coming up. because these thermal fluids will most likely also be changed after 60,000 kilometers or something around that. We also know today that gearboxes will go away. That was also a debate in '16, '17 when people said, "Oh, it's electric cars and there will be no more gearboxes." It's not going to happen. We know for sure, but for premium cars and for sports cars, but maybe later on also for the mass market, there will be gearboxes, which means there's also a very substantial demand for these [ kia ] fluids and for the electric driveline fluids. So in a way, and this is really now also new because we have never quantified the market potential. There is a big potential for us. And to back this information, if we look at our project pipeline today, we have over 100 fluid projects for battery electric vehicles right now with a value of over EUR 0.25 billion in our pipeline. And that shows that the potential is there and that the potential is also growing and that a large part of that market is accessible for us. On that slide, we say 50%, but we believe this is a very conservative estimate. So overall, very attractive for us, e-mobility, also in the meantime, through our project work and also through some work in industry committees, we are definitely perceived as a front-run on e-mobility. And we believe that this will be a massive upside potential for the Fuchs Group in the years to come. And with that, I hand over to Ralph.

Yes. Thank you, Timo. Just building on what Timo said on our long-term market expectations with regards to car sales, which means new registration, the car population, but also with regard to the market potential connected to the E-Drive and the e-cars in the field of passenger cars. The question is, well, where is the market? What is it? And I think you heard about our BluEV Technology. And this shows the market. It's not about the e-car. It's about the E-specific applications in and e-car. And we were talking in the breaks at our [indiscernible] how much sales do we do with e-mobility. Well, that's difficult to say because we still have all the fluids connected to the car, which are not e-specific. Like a grease for steering engine or for a steering wheel or for a break. But there, you only see the e-specific applications where we are active in. You see red ones and you see blue ones. The blue ones are basically application and lubrication point where the product remains in the car, in the part, in the component and the red ones are during the process of manufacturing of parts and components, which are then built in an e-car. So -- and then we talk about the functions of the lubricant connected to e-mobility, and they are pretty common and known to us, it's about reduction of friction. It's about the cooling and it's about protecting parts and components. So we are basically ready to work on all these fields, and Timo mentioned the number of projects we are running. And these number of projects represent a huge sales potential for us. And you can see also, also that was part of many discussions during the breaks. There are new applications. They are quite forming products and forming applications, which are not new to us, but there are contact creases for electric connections. For example, this is new to us. There are also new markets are appearing with regard to the e-specific applications in a car. Later on, I'm also going to talk about electrolytes connected to our start-up e-light, just to put that into perspective with regards to the battery technology. So, so far, the number of cases that we work on and where we believe we can go and exploit the market potential Timo was just quantifying this $1.5 billion in total market demand. So here, coming back to the transmission part of our e-mobility also that one, it's not -- it's again a complex world. It's not the one transmission oil. There are different technical requirements. You can find on the left side, whether it's protection performance, cooling and friction control and also the way how fluids are developed are different depending on the technical specification coming from the customers. So also here, our research and development, our let's say, prospects and business development is very heterogeneous, very broad, and Fuchs remains to be a partner of the car industry and also of new suppliers and customers for us to the car industry for the transmission fluid in e-cars. Also, we work on pure water containing products, we call as [ vision ] fluids, so non-oil-containing products, which have both duplicating capabilities, but also cooling capabilities. So this is just to show where is the market, and it's not always easy to say this is the size of our business with e because that's direct and indirect connected to hybrid and full electric vehicles. Now talking about our small equity share we bought in E-Lyte. I would like to start with a quote from one of the founders of E-Lyte, saying that electrolytes are performing fluids, and they are the heart blood of the battery, which means energy transport. So what does it mean? The electrolyte is a liquid. I think in talking about E-Lyte, we talk about liquid electrolytes. And the function of the electrolyte is basically to get the energy from A to B inside the battery. And now you can ask yourself, why would that be an investment case? Why is that an investment case per se electrolytes. And why would that -- could that be a good investment case for Fuchs? And I have put in here, you can see a few elements why this could make sense. I mean, I think it's fair to say that at the moment, huge investments going on in Europe in order to bring the battery industry to Europe. So the full mobility transformation won't take place, just importing batteries and all battery type technology from Asia to Europe. So there will be a new industry coming up. In Europe, there are massive amounts, which are spend at the moment to build battery industry in Europe. And such a new market also offers niche applications of us niche products, and that's exactly where E-Lyte is active, and that's exactly where we want to be effective. So electrolytes are always considered to be a commodity might be true, but not for us because there is a market for high-performance electrolytes, and that is very much what we were looking for. And therefore, there is the investment case to invest in electrolytes. Furthermore, now talking about us as a company I think for us, it's also the access to a new market, which is somehow a driveline fluid for e-cars through the electrolyte. So for us, it opens up a technology and a market we have not been active so far. And at the same time, we can offer many, many elements to be successful in this market, E-Lyte cannot provide. And that combination between new market entry, and our expertise we have, we believe, was a good fit in order to go so that equity share of 28.4%, I think, in that very small -- in that very small company. But talking about electrolytes, I think it's also important to say and to emphasize that we are not talking e-cars only. We talk about battery technology and the battery technology is not only for e-cars. And you find here some applications where E-Lyte wants to be active and they also have projects being, let's say, on their project list and also they are working actively which is not only the E-Drive. It's also drones, for example, but also power tools, consumer electronics, communication tools. So all of that requires high-performance electrolytes where we can be active, which is not only the e-mobility in terms of a passenger car. I think that is also important to mention. And on the next chart, you see the logic behind. The joint venture on the left side, you find our expertise, why we believe we should be part of the joint venture. And the right side is what electrolyte brings to the party -- E-Lyte brings to the party. And we don't have that. I think we don't have at the moment the access to the industry nor do we have a network for the electrolyte industry. At the moment, we still don't have technical know-how. So the E-Lyte company. I mean, it's a too handful of chemists, basically, who do nothing else than working on electrolytes and battery technology. So there we get access to technical know-how. And we, on the other hand, we know how to do it. We know how to do the product safety, the procurement, the raw material supply, the manufacturing. I mean, to do such type of a business to convert projects into business. I think that, I think we know very well. And that was the reason why I think we believe there is a very good fit on the right side. You see the next steps. So we invest now, the money we gave into the company will be spent in order to build a plant. That plant will be built in Kaiserslautern in Germany. And there is a quite challenging timetable behind. So we would like end of the year, beginning of next year, we would like to manufacture in a pilot plant, the first electrolytes in the industrial scale. And then I think one year later, we should see the SOP for a large volume manufacturing for electrolytes. So therefore, I think we have a lot to benefit from that joint venture, and that's also an attractive market to us. I think Lutz, that was all, I would like to say on the e-mobility change and the fascinating world of the new applications connected to e-mobility and also to E-Lyte. And then I would like to hand back to you. Thank you very much.

Okay. As promised in the very beginning. Slide #93. You have been very patient today. That's the final slide, but just one more summary of the 6 key messages. So I hope you'll find them all during the presentation. First of all, lubricants. We love our unique business model. And you've seen from the various applications that is quite interesting and geared towards the future as being an innovation enabler for our customers by our tailor-made solutions and to help them with their technology transformation. I think at the end from Timo with the market and [indiscernible] the application on the e-mobility, we see the mobility change as a net gain for Fuchs. It's a very interesting thing for us. Sustainability for lots for the [ tough spot ] after lunch, but I think a very interesting presentation, you could also see us helping our customers to operate more sustainable as the lubricants provide specific help for the CO2 footprint from them. It's very interesting to us. Digitalization from Dagmar, mainly talking about services and how the customers perceive dealing with folks. And at the end, the growth, we were waiting for a long time. I think we have a quite a nice heavy target ahead of us. We have detailed planning behind of that, is fundamentally based on segmentation. So all our colleagues work very hard, and we look forward to exploit it in the coming years. That sums it up, and now we are more than happy the 5 of us to take your questions and go through the Q&A. So thanks for your attention, and we go from there.

Okay. So we start here.

This is Sam Perry from Credit Suisse. Just on the sort of CapEx program that went to 2019 and then you've spoken about 4 years of difficulty you post that in terms of volatility. If you were to sort of fill that capacity that you've added, what would be the operating leverage in the business? And how much does that help you get towards your targets?

Well, number one, our entire CapEx project was not just to increase capacity. Unconditionally reliable also means we substituted older plants by new more efficient plant. Just think about the new site in Australia. We had the one CapEx part in Sweden, where we built the plant for the acquisition where we specifically did not want to buy a standard over there. Specifically, we did not want to buy the [indiscernible] side. We did capacity increases on the Polyurea grease plant in Kaiserslautern, and on our specialty grease plant in Chicago. Those are the 2 tougher parts because you need a couple of years to get all our customers for lifetime fillings for [indiscernible] applications with regard to processes, localized raw materials that takes years, we are well on our way. And then we've increased capacity mainly in China, but also in some of our European plants, but also in the United States. And for us, that helped us to go over the last couple of years, will further cover us in the future. We are not so much stuck with the capacity question. Our deal is the complexity we are dealing with and to be unconditionally reliable for our customers. So that was one massive wave of CapEx ourselves, but we also have now everything state-of-the-art manufacturing, laboratories and offices that what we wanted to clean up one time.

Okay. I guess a sort of related question. Then would be if you're sort of moving towards the specialty part where it matters less around capacity and you stepped away from the margin target, but you've kept the absolute target. Where do you think that margins would go to? Or where would you be happy for them to be out to get to the EUR 500 million?

We only stepped away from the 15% due to the massive inflation. Dagmar was showing you one side of 20% sales price increases during the year 2021. And don't forget, impact was at the end of the third quarter and in the fourth quarter. So in the full year number, only one part was in fail, so you get the full impact this year. Plus, we expect another increase in the same magnitude. So you talk, if you just added of about 40% plus. If you put that on the sales price, you still want to make 15%. Then finally, the world is a [ funny part ], and that's not going to I've never seen in 26 years such an inflation. Therefore, that question for me, with the 15%, bear in mind, the EUR 500 million is much more important. That is completely built on segmentation, but also on new markets like the electrolytes, like on the service part, digitalization. We have a full business plan the 15% in times of such a high inflation. It's just something promising you would be [ high in the sky ] for the next couple of years. We don't know how long that goes.

Sebastian Bray of Berenberg Bank. I had a couple of questions primarily on e-mobility. The first one is there a contradiction between keeping CapEx at relatively low levels of EUR 80 million per annum by historical standards relative to depreciation and the ambition to gain sales and take share in your e-mobility applications. I think a EUR 250 million sales pipeline was mentioned earlier. Another way of pushing this question is, to what extent is existing production interchangeable with new e-mobility applications. My second question is on 50% of the market for E-Drive fluids and cooling fluids being identified as relevant for Fuchs. Why is the other 50% not relevant? And a final one on inputs. I would refer to Lutz's words earlier on changing inputs for net zero. But if it's not oil seed or palm oil, what is it that's going to be used as an input in future?

Maybe we take the 3 questions at a time. And I can answer half of the first question and then I hand over to Lutz with regard to transferring production from regular gear oils to the EDF fluids. When you look at our depreciation, we come from the period of time, Dagmar, we had about EUR 30 million a year, EUR 35 million, EUR 40 million a year. Now we have a depreciation of EUR 80 million a year. And if you say CapEx will be on the level of depreciation, it allows for projects of EUR 5 million, EUR 10 million, EUR 15 million a year. It's not all just pipes, pumps, cars and computers. It does not allow for a EUR 40 million plant. But for the EUR 80 million, we can invest quite some number of projects. So we continue to believe that's good enough I think, Lutz, when we look today for our gear oils. I'm not a chemist, some look like tapwater because they are very thin already, and I can't expect that making those EDF fluids is a completely different manufacturing technique. But if you would come here and tell us a little bit.

Question 2, let's say, additional fluids that we have a deal with beforehand. And so the EDF fluids, they have specific requirements, let's say, probably it needs to be dry. It's needs to be cleaner. And these sort of things we can handle because this is a usual specification, which we need to fulfill in other parts of our product line. So, so far, it's not a new technology. It requires not a new process. adaptive processes and our plants can handle it. This is not a significant problem. The electric fluids is a similar thing. They need to be dry and clean, dry and clean. This is a situation any specification which we can fulfill with our units because most of the units. And in so far, this is not a significant problem of segment to change from A to B.

Lutz maybe the next your question, then Timo for the 50% of [indiscernible].

That's your question. Could you repeat it? I didn't get it due to the [ beeps ]

Look, when you were presenting earlier, you mentioned that the drawbacks of palm oil and also the disadvantages of growing oil seed for -- you mentioned earlier the disadvantages of palm oil and the disadvantages of oil seed for using as a feedstock for base oil generation. If it's not those that are going to be used in the future and taking new petrochemicals out of the ground for whatever reason, it becomes more difficult. What is going to be used instead?

You mean substitution for palm oil and/or for [indiscernible].

Yes. So what is going to be the source of your base oils in future [indiscernible].

So at the end of the day, the source of the base oils can be organic waste. This is basically each and every type of organic waste, do not have the units. But I think with the partnerships we are building up, we can, let's say, develop an industry which really uses the base oil, the organic waste to generate base oils. There's enough waste available, organic waste available or to use partly, I would say 10% is possible to 15% to replace through biochemical process to use algae or bacteria, to generate molecules that we are going to lose, further substitution of petrochemical primary products for industry. And this is a real challenge, but it's a much more greater challenge for the rest of the industry, not to get petrochemical products. But anyhow, the substitution to 2040 from our point of view is possible. It was recycled material, reprocessed material, organic waste process material and biochemical processes.

Yes. So the next question was about why only 50% relevant for us with regards to the market for e-fluids. And this was based on the assumption that for some parts of the market, it will be easier to find solutions and therefore, there will be steep competition also more focused on price, whereas we want to pick the 50% that are more demanding which fit very well to our specialty strategy and which just offer a nice growth potential for us also with regards to profitability. So it's more like the more attractive part of the market we want to go for, and that's why we decided it's only half of the totally available market.

[indiscernible]. I've got 2 questions, please. Firstly, looking back at your Slide 83, where you showed the potential of the EV fluids the market potential growing up to EUR 3 billion. Looking at the 2025 number on that chart, that would resemble let's say, EUR 1 billion sales, 50% of that, as we just learned addressable Fuchs. Could you elaborate how much of that sales-wise, but more likely EBIT-wise is baked into your 2025 target. Is that presumed to be of, let's say, equal, let's say, margin-wise, equal profitability as the existing business? Or is there a ramp-up phase where that business needs to be grown and will be less profitable and profitability kicking in later. That will be my first question. And the second question is when learning about what you think is the dispersion of combustion engines by the year 2040 regionally? It seems like, as you stated, Europe will be mostly combustion engine free. Other regions will be growing and declining at the same time. So basically, what does that do to your production setup? Where your sites are located today? Only very few sites are located in China and also in North America compared to the number of sites you have here in Europe. So will that have, let's say, a significant impact on how your sites are setup by the year of 2040, please.

So I do the first one, which was pretty much asking about the profitability for these fluids required for the e-applications. Well, if you look at our markets and also new technologies, it's usually not the pattern that you develop new products. And initially, they have a lower profitability than the old ones. So you should hear when new technology comes up and you develop customized solutions and you are also a little bit ahead of competition. You usually see also profitability above average. So that would be our assumption also for the products we sell to the e-mobility industry. So it's not a low profitability and then we go up over time. It's more we start with a very healthy profitability, which might be also a little bit above average. That's our assumption on that one. Yes, I don't think we have broken it down that in such a granular way, but it's certainly a substantial part. I cannot give you a million number.

Yes, the other question was with regard to our manufacturing or production sites. Depending on the development of certain product groups, I think that's primarily a question to Europe. And you have seen in one of the charts Dagmar has shown what the profit contributors are coming from the EMEA region. And there is one element which is considered manufacturing and logistics excellence. So yes, we will work and we worked already today on 2 elements. The one element is that we would like to further specialize our plans throughout the EMEA region. So already today, not all the plants manufacture all the products. I think there is today already a certain degree of specialization and that will further be the case. And in line with that, we also take into account our expectation on certain product groups. What would be the manufacturing capacity we need per product. And having that in mind, we will streamline our production landscape in Europe according to our expectations.

Matthew from Bank of America. A couple of questions, please. The first one, Stefan, it's around the budgeting process. So if I understand it correctly, you've created these 200 cells or so and the organizations come up with a lot of ideas of how to take the company and the business forward and then generate the growth. How do you risk that? I'm inferring from the buyback you announced that you're pretty confident that you can do these numbers you're talking about. But how do we ensure that the organization hasn't been overly optimistic in its projections? Second question, maybe for Dagmar is around the profit bridge. So on the slide you showed, I forget which number, but you showed it from a geographic standpoint of Asia being a lot than you. But conceptually, why do you think profits grow twice as fast as revenue? What are the big items there? Is that mix? Is that operating leverage? Why do we get, say, per EBIT or profit growing faster than top line over the coming years?

First of all, I don't think that our people have been overoptimistic because we factored in certain declines. We also looked at the segmentation and we challenged our colleagues. And that's the number we published to you. So I don't think that this is, for us, pie in a sky and overly optimistic. So it's not that we just had up whatever came from the basis and show it to you. So I don't think it's overly optimistic.

Your question about the profit bridge and why profit should grow much faster than top line, where maybe it's a mistake or I didn't explain it in the right way because on the on the earning bridge, yes, we took an absolute number, and we stepped back or stepped away just for that time from an EBIT margin. And therefore, our target for top line is a target which is there beyond inflation. We don't know today what will be the starting point. And therefore, I don't know today what kind of sales number we will see in 2025. I would love to, but I don't know.

So I understand why you wouldn't have a percentage margin target, I get that. But you're -- to get from the 360 or so that we were to the 500, is the assumption within that, that the drop-through margin on volume growth is very high, you can fill up capacity build. The mix is good, productivity is better?

All Dagmar is saying that, at least in my experience, the last 26 years, we have never seen such an inflation. And if you take 2 years in a row, we're plus 20% in sales-wise, we can't tell you whether we talk at EUR 4 billion, EUR 4.5 billion or EUR 5 billion. That's the only reason why I don't say we go over proportional. We are just not able today to tell you what our EBIT margin will be because we have never experienced such an inflation. We fight every day to get our price increases in a timely manner. I think we've done pretty well so far. But all our people and all the competition is geared to capture raw material is, which is not good enough because we need to cater for the capital, which we find in increased receivables and then inventory. Therefore, we have not told you any -- [indiscernible] the day for 2025. We've only told you a profit number.

[indiscernible]. Can you talk a little bit more about your vision fluids, so the market for water-based fluids, how faster developments in terms of functionality? And how do you expect performance to eventually match up with oil-based fluids? And what's your general market vision here?

With our vision fluids, we developed our water-based tools. We have a number of water-based fuels and water-based other products, water basis and the key award. Water does not mean clear water. That means part of it is water, but the water-based fluids are good efficiency. They are sustainable into the water content. And at the end of the day, the problem is the handling water of upgrades. And you need to take care for the water, for the bearings and this and that. But at the end of the day, we have projects ongoing. And we think that water-based boats may be in this sort of application or other applications and adores already in long-term applications. In specific [indiscernible] applications, we think that water-based fluids will become a major significant part of our sustainable product feature. So it's limited due to the fact water evaporates. But at the end of the day, it covers a lot of applications at low 10 and where you can apply the sort of [indiscernible]. The combination is quite tricky, but this is only not beginning.

Markus Simon from Lloyds. A question regarding e-mobility. Once again of the 2035 market estimate addressable market, EUR 1.5 billion, what would you see as your natural market share given the competitive landscape?

This is actually a question that's not so easy to answer because there's, again, new customers, new requirements, also new competitors that are active in that field, but we sure striving for double-digit market share there. And then we need to see where that brings us. But we are confident that we can capture substantial market share on the demand for e-fluids.

What kind of market share do you have in similar environments or similar subsegments of the market?

Well, it really depends. And as you know, we have so many different applications. certainly also have a double-digit market share, for example, in other gear oils and double clutch transmission fluids and stuff. So it's something which we believe is achievable for us and which we have shown elsewhere.

And how high is the level today of revenue linked to combustion engines in automotive? That's a little difficult to answer, and Stefan, I think.

You can say more or less when you look at our product portfolio, and this is the difficult part. We showed you today, we work in regions, and we work in divisions, which is applications. But we show you in the annual report is the product portfolio. So when we talk about automotive, it can be a 100 tonne dumper in a mining, which will never be electrolyzed. But more or less, you can say around about half is related to the powertrain of our automotive business. But if you have a stationary engine in Saudi Arabia or for biogas, it has nothing to do with the regular combustion engine of passenger cars and light vehicles there, we are not so strong in. We are mainly in the oil part, shock-absorber increases. But more or less, you can say half of the automotive business is directly linked with the powertrain. But you've seen from the market data or Tmall has shown you that it's not the amount of cars manufactured, but of the car population. And when you look at China, you can make the same example in India or in Africa. We are very confident moving forward being in the heavy-duty market. And participating in the market place in those companies that it's not a black-and-white scenario where all the combustion engines and discipline.

Martin Roediger from Kepler Cheuvreux. First question is on the organizational structure in the market segmentation. You have implemented this strategy already more than 3 years ago. Can you provide an example where you can show how successful this implementation has been in the last 3 years? So in general, when you add all the actions for market segmentation in this organizational structure, how much did these actions contribute to extra sales or extra earnings compared to the previous strategy that we can see how successful this new strategy is?

Thanks. I think it's an important question. We look on a monthly basis. They have all done budgets. So we work, for example, on our larger divisions, all the time on budget since many, many years. Segments is just the division is broken down. We have the segment, we can have a look each month, how to do the previous year, how they do to budget. Rest assured if we invest in 12 dedicated sales coordinators worldwide, they pay off, but we don't want to show you food numbers or win numbers because we are a listed company. We have competitors who just jump in that information. Therefore, we don't want to make as example. But rest assured, the EUR 500 million, we don't put out with the whole strategy behind and without checking the performance on a monthly basis.

The second question is related to sustainability. I think you certainly also check on a daily or weekly basis, your supplier base and of your suppliers certainly are a bit inferior. If they really get sufficient natural gas for their production. And I would like to understand, when you talk with your suppliers, where is your biggest fear right now, especially for your German hubs and the production there for availability of your raw materials, your input materials from key suppliers, be it LANXESS or be it oil companies or BASF or whatever? So we can get a bit of color, are you more concerned about difficult of base oils or different additives, things that -- and maybe also your thoughts because everybody is right now trying to get around and reduce natural gas need and replace it by other energy sources, so maybe you can give also color here. What is your feedback that your suppliers can solve the problem?

I can tell you a story, but what the people say, if the gas is out, the industry is there, will stop. There is no room, no alternative. If you listen to our friends over the Rhine, they get no cuts in their debt. And same is true for each and every company doing polymers, something like that. In the moment, the gas is out, the industry is down. And this is not the problem price because we have so many alternatives to suppliers coming out of the out of other parts of the world where we can substitute partly but -- especially in the landscape of the petrochemical industry, a lot of people are now changing from gas to oil. And this change is completely the demand product slate ratio of the refineries operating in Europe is a complete disorder of the whole value chain. At the end of the day, you can stand on the table and jump up and down. If the gas supply out of Russia stops tomorrow, then we have a significant problem in Europe, and it starts with pharmaceuticals, with hygiene articles with everything you think that you got speakers for headroom, nothing will happen out. This is a clear message from the supplier. But the good news is, the Russians cannot stop the energy, the gas supply due to the risk that the gas supply will then be bet. You cannot close the gas source is impossible. If you close it completely, it's there. So and so far, at least, it will be a difficult time. For the time being, the supply is there, partly being substitute by renewables or by organic waste of plastics or something like that. This is, to a certain extent, possible. For the time being, we are carrying a significant inventory, and we are not incurring a significant inventory because we have bad planners, but we are looking into the future and say there is a risk. And for us, it's better to carry a high inventory and not losing customers and to reduce the inventory and say we save a little bit net operating growing capital and then we cannot supply the customer. But at the end of the day, at the end of the day, for the time being, supply is safe. The European supply has, for the time being, no clear substitute. BASF partly can substitute NAFTA, but not fully. At the end of the day, this would be a case for the German institutes, no doubt about it. We are safe, more or less, but I can guarantee you that BSF stops operating. The rest of the industry in Germany will be ideal. So it's not a. So we are in a situation in Europe not related to our industry with our company, which we haven't seen before. So this is really riding day and night. And one can only hope that it comes not true, let's say, close the old. Partly, we are covered. The base oils are there. This is a pure crude oil-driven industry. This is not a big thing. And the synthetic ones are safe and clean, and some polymers making short for us, it would be a harmful thing for our portfolio. We will not kill it immediately, but the rest of the industry will be significant. So at the end of the day, we probably can supply what the customers will have modeled in. This is the answer.

For our own plants, a little detail, we had, I think, [indiscernible] 3 plants in Europe, we switched from oil to gas. We now switch back to Combi oil and gas. That cost about EUR 1.5 million for the 3 plants, so it's not massive [indiscernible] how long it takes to get the spare parts and...

This is Rita [indiscernible] from Bank of America. I have 2 questions, please. My first is on e-mobility. I'd like to understand how you classify or define e-mobility-related revenues? So in ione of the slides you had a 50% share approximately in America and China of PHEV as well as HEV. So say this 50% were to be pure BEV because OEMs want to streamline platforms, how does that impact your addressable market? In other words, what is the lubricant content of a PHEV versus a POV, is my first question?

Can you repeat the question without the micro because we get an echo here. Just really down here. If you just repeat one more time about without.

[indiscernible]

E-mobility is battery-driven. Each hybrid thing is internal combustion. So this is the count. And we count if we say it's 40% or 60% BEV e-mobility, that is pure battery-driven cars. The mobility or the hybrid ones, anyhow, it's really a questionable concept, I think 2 drivetrains in 1 car at the end of the day, this is good for us. because we've doubled the demand also specific lubricants or think so about the demand for car or a hybrid car, maybe full hybrid or mild hybrid is higher than in a normal internal combustion and you took the fact that you run 2 drivetrains in the cloud. This is good, but we consider it as a simple internal combustion engine not evaluating the number of mild or full hybrids on the capable agent with disadvantage to our prognosis on the long run is conservative. And so far, we consider everything hybrid is internal combustion traditional and e-mobility pure battery, probably a little bit high fuel cell, but QLs probably not so much an option for passenger cars than we do for the [indiscernible] conditions around [indiscernible].

This is only -- it's true for the electric drivetrain and the cooling fluid. So far at least, we cannot distinguish whether a windshield wiper or a some roof or steering wheel goes into combustion engine car or in a Tesla or anything else [indiscernible], seat adjustment, [indiscernible] systems.

[indiscernible]

So first of all, the competition landscape here at AG, you have cut the big ones doing 400,000 ,500,000 tonnes of electrolytes. This is the standard traction battery, and standard traction battery for point BYD, what have you with, let's say, horsepower of 100 on small engine and then that's it. This is the standard mobility product, let's say, we say out of the concept. We are focusing with the electrolyte investment on the batteries for high-performance traction batteries. That means high energy throughput and power for loading. And this is, for example, if you have a -- for example, the sort of batteries there. And there you need special electrolytes, especially designed for construction, architecture and the energy management and the battery. And for the people like cattle or doing the sort of standard batteries or some, which you'll find in Tesla, for example, they are not interested in. It's not -- it's a market niche and they say, okay, it's nice, it's fine, but no. And the other piece is why is our market accessible besides that. as already lined out, we are focusing on special applications. One is high-power batteries then stationary batteries into store energy if we have an overflow of energy coming out of the renewable part, we need to store it somehow and part of it is better. It's not the ideal solution, but start of this battery. Therefore, we are focused on it. Then where we have, I mean, a huge power takeoff in buses, partly big trucks and small and little applications at specific geometries like in smartphones, in drones and medical applications. These are specifically designed electrolytes. Electrolyte is not what you know probably out of the school. If you take natrium potassium and in chloride and 2 electrodes and something happens, this is a composition of more than 10 to 15 substances, which you need to balance out. And balancing out takes time and is adapted to the structure of the better. So this second part of the question, I forgot.

Solid versus [indiscernible].

Okay. This will be competing technologies. We have different concepts for traction batteries. So there is -- on the one hand, you can think about sodium-sulfur batteries, sodium-oxident batteries and you can think about the standard electrolytes where you can have the lithium or iliumicon anode which we can handle as well. And the other part is the so-called solid-state batteries. The solid-state batteries consist of an anode, which is purely them. This is highly reactive with oxygen. So in the moment, oxygen drops in, it is growth. So it's a safety not under control for the time being. Then you have the electrolyte, which is a nano-type ceramics where the lithium ions are moving from age. The key problem is substantial thematic problem is the phases, let's say, pressing a little bit solid basis. It's a lithium-ion [indiscernible]. It moves a little bit. It's like a sponge. It gets bigger. And when they are out [indiscernible]. And then you we have the decoupling of the phases, solid phases. And this leads to a short circuit. This is not fully under control. And the second part is the sort of -- there are some needs moving this also. I mean again, the specific problem specific province of the solid-state battery, which has not been sold. And there are a lot of companies saying, yes, we have it, we have, no. Taking into account it will be solved, and at a certain point of time, it will be solved, no doubt about it, no doubt, probably 8 years, 10 years, I don't know. Then you have a solid-state battery. What is the solid-state battery? High energy density, that's good. High energy outflow, no. So the specific thing is that the energy outflow is not -- possibly it will not be a high support match battery. And the other thing is it can store, you can load it with this high power in 5 minutes, 8 minutes, 4 minutes, 150 kilowatts. So now think about 150-kilowatt hours in 5 minutes. We need a power plant in the backyard to do the better. And the whole infrastructure is laid out for food electrolytes all over Europe. The whole infrastructure is laid out all over Europe or sort of macrolides. So at the end of the day, it will be part of the structure. It will be part of the technology, but it will definitely not substitute the electrolyte driven batteries because technology is simple. To a certain extent, it's -- it has power, it's easy to handle and the whole infrastructure and loading infrastructure is here too. Otherwise, if you imagine driving a German [indiscernible] 5 cars in a row with taking out 2 megawatts at the same time, impossible. So at the end of the day, yes, we had it under consideration. Yes, we have to move forward that it will come. Yes, it will be [indiscernible]. So it's not from our point of view, especially when looking at the mentioned. It's not a stat that we see a moment chemical solid state [indiscernible] to take down.

So now there's a question from the online. So I will -- it's directed it to you, Dagmar. So the question is in how far the sales CAGR that we have given out and how far that is driven by price and by volume? This is the first question. And the second one is in how far we have already digested the price increases that we have seen? And how far we need to -- or how long it takes to catch up in terms of the price increases we have seen? So I think these are the first 2 questions for you.

Well, the first question, if you look at our midterm target, mid-single-digit percentage growth per annum. In the past, our growth was like 2/3 volume, 1/3 price. And in a normal environment, so in a non-inflationary environment, that should be quite a good guess looking forward. .

Okay. The next question goes...

The other question was how much is in sulfur? I mean, we are by far, far away from having anything in sulfur. I mean the year 2022, we continue to increase our prices. And in the beginning of '23, we will tell you, it was a dynamic process during 2020. Some parts will increase in the second half of the year, will only be seen in the sales inflation in 2023 comparing to the 2022 year. So that's the answer to that question.

Okay. The second one goes to Stefan. So that's I try to read it here. How many Fuchs family members shareholders are there? And how do you make sure that good corporate governance is in place?

I think it's a very important question. As you know, the Fuchs family holds 55% of the voting share, of which around about 51% are combined in the rural Fuchs KG in a company. There, we are shareholders. So most of the shares are with my generation. So my father has 2 sisters. We are 7 shareholders of my generation. So with the 3 of the second generation, we are 10. And then comes the generation of our children, which is then, I would say, another 15 to 20. But they hold singular shares themselves. I think the corporate governance in the Fuchs Group is given as we are very well aware as the family that the only own, let's say, a little bit more than 25% of the entire capital. . And we have an independent Supervisory Board with an independent Supervisory Board Chairman. And I think that's how we run the company. The family holds on sedan Supervisory Board as a large investor, I think that's okay. where there will be always a family member and the Board has to be seen, but I think we really run the corporate governance very well. All the family shareholders know as much as all of you. They get the information as we publish it, and I think that's very important.

[indiscernible]. Just if I understood you correctly, you said that you are pretty certain that gearboxes will come back in EVs. Can you maybe elaborate on that? Because -- maybe secondly, if that's also in your volume assumptions on your 2030 and 2040 targets? That would be nice.

I think look, the team on Ralph has done very well with the entire e-mobility market, it's a developing market. So the answer you would like to have, we can't give you is a developing market, and it's factored in the growth we anticipate. We don't want to break it down for you step by step. I don't know whether the question is right, whether the gear oils are gone and come back. I mean they were never gone, partly in the discussions that were gone, but most of the cars we see, a pure battery car still have what we call an EDF pipe. So therefore, we can't really answer the question what goes out exactly what comes in. We have faced what we can anticipate today in a developing market where we see a net potential for us. We have factored into the best we are able to, but nobody really knows where exactly the market goes in the next coming years. .

Andrew Stott from UBS. A couple of questions. Can I start with -- I think it was Tina, you said in your presentation that over the last, say, 3 or 4 years, sorry if I misquote you, this is what I heard. You've seen quite a difference in your feeling and maybe your customers feeling about your revenue per vehicle in electric vehicles particularly with regards to coolants and fluids. So is it a technical development or a number of technical developments? Or is it just a general learning process? Just a bit more on that, please? And I've got a second question.

Thanks for the question. I think you're exactly right. This was a learning process. I think initially, as in many fields and the lubricants were a little bit underestimated. So if we now look at these electric vehicles and also the thermal requirements and what Lutz explained, it turned out that this is quite tricky. It's tricky application. It's has also turned out that the lubricant really plays a key role. And I think that's what our customers have learned and also learned through failure and also through like batteries that did not charge properly and other things. In a way, it was learning by doing because everyone wanted to enter that field fast. And we now know that this will be a specialty market, which is good for us, which requires more R&D work. So it's a high burden on our R&D teams around the world, but they are used to that. And that's why we are certain that we will really benefit from that market, and that's why this is an opportunity for us. But you're right, in the end, it was more open now through the first platform through learning to new performance requirements. It just turned out to be very favorable for us.

Completely different question, and apologies, it's utterly miserable, the question, maybe better address to Stefan. I mean, in the past, you've been pretty good in a recession, as you showed, Dagmar,you showed the slide. But I guess there's this black cloud at the moment over the whole industry, whereby we have a scenario of high energy costs and severely reduced volumes. And we've never seen that in the history of the industry as far as I'm aware. What do you do in that scenario? What -- how do you -- what levers can you pull?

I think when you look back, we have always reacted very quickly. When you look at our profit and loss account, the biggest impact we have from the raw material pricing. Normally, when you really hit the recession, you also see a significant decline in raw material prices, that's when we get a lot of tailwind. And that's what we have shown in 2008 and 2009. So I can't predict what kind of a dark cloud will come or whether the hail will come. But I think we have shown in our 90 years of history that we have always reacted appropriately, and we will do so also when it comes. We don't see it totally dark but we see the clouds on hand there's a lot of things happening at the same time. But don't forget, there are not new clouds. I mean, we operate in the fourth volatile year in a row. So let's wait what see. But rest assured that we will react in order to also safeguard our profits. I mean we are now on the stock exchange since 1985. We never had a loss. We always paid dividends. Dagmar made a new promise on the dividend. So we are optimistic about our future recessions we can't influence, but we have to see what comes and then react accordingly.

Any more questions?

2, please. The first is on what is the definition of an electric drive or driveline or drivetrain fluid? Because when I think of electric vehicles more commonly, I tend to think motors greases is as an area that is potentially of interest. And another way of putting this question is, is the $3 billion guided for market size for 2040 for electric vehicle applications for thermal and electric driveline fluids with some total of the accessible market for Fuchs for EV only applications or is it larger than that? And where do motors greases in? .

Can you repeat a few words without the microphone because we get the echo here. Sorry, but... Without the microphone, can't hear us, our external guests. Sorry for the...

So the greases are always part of our automotive world. And since we have the mid hybrids and the full hybrids already in place, this specification for the greases are already there a long time, which we can handle in the change a little bit, but this is not an extraordinary additional technology room, which we need to cover. So this is more or less in the eternal at the end of the day, this is an additional market, which comes up. And the other standard or the standard applications we have, we have already under control, and they are not part of [indiscernible].

The second question is a simple one on trading. How's business been doing through May, April, June time? Is there any sequential difference between those months from your perspective? .

Well, we know our first quarter and in the end of July, we will publish our second quarter. Of course, in March, they started the cohort strategy in China with these massive lockdowns of big cities. Of course, it has an impact on our local business in China. And yes, as well as the geopolitic crisis, with Russia, Ukraine is going on, and we still have this uncertainty and disruptions regarding the supply chain and, of course, the demand of our customers. And with our first quarter numbers, we be a bit more precise regarding our outlook that we said on the earnings on the EBIT side, we go to the lower end of the range, and that's still in place. And yes, therefore, we stick to that outlook, and nothing else to report today.

Okay. There's another question from the webcast. I'll try to rephrase it because it's quite long. So on how far has the competitive landscape changed given the fact of the war in Ukraine and especially with regard to Russia, like competitors like Lukoil are seriously handicapped? And how far is -- has that been a change to the competitive landscape?

I think there are 2 answers to that question. The first answer is regarding the market in Russia. That has fundamentally changed because there's -- there are many players being completely pulling out of Russia, but there are also new players coming into Russia. So there are Asian competitors who entered now the Russian market, while European and Western type competitors pulled out. So there is still competition in Russia. And the other part of the question is what about Lukoil and other Russian players on the global lubricant market. I think that has changed because there have been quite some aggressive approaches from -- also from Russian lubricant players in markets in Europe, but also in Africa, for example. And I think they suffer at the moment because they can't do their business like they did before. So there has been a change with regard to the competitive landscape in Russia due to the conflict in the Ukraine.

Okay. There are no more questions from the webcast. And if there's not some one lese asking for questions so then we may -- maybe one -- last one from Martin.

Regarding the dividend policy, you changed it to an increase in dividend every year. Does this also imply that we can expect also an increase in the payout ratio, which is -- has been 56% for 2021. In the past, we had also fluctuating payout ratios. And recall that a couple of years ago, it was already above 60%. So could you consider this as a viable option? Or do you want to keep the payout ratio as it is?

Well, as you know, we don't look at the payout ratio as we in the past said, we look at the dividend we paid out last year and at least keep it at that level. But in fact, we increased it 20 years in a row. And now we changed or upgraded our dividend policy, and we are going to increase dividend year-by-year. And of course, it's a target -- our target is not looking at the payout ratio because if our earnings would go down 1 year, immediately, the payout ratio would go up, but I'm convinced that with our dividend policy, we add value to our shareholders. But in the future, we still won't look at the payout ratio.

Okay. With that, we have come to the end, I would say. If there are no more questions open, then I think Stefan wants to make some closing remarks. Stefan, go ahead.

Yes. First, I would like to say a big thank you to all of you that you all made the way here to come to visit us in Manheim to take part of our Capital Market Day, the first one since 2019. And it will be my last one for folks, and that's somehow a bit sad. And I would like to make -- to give a big thank you to Lutz and his team who made the whole organization and the setup and the great launch. So yes, thanks a lot for everybody. And my colleagues, of course, for their participation and I must say, for me, it was a great day.

Thank you, Dagmar. Thank you very much for coming. Thanks for the interesting questions. I really hope that we covered some areas of uncertainties you were carrying around. We are positive about our future. recessions. We need to see where the world is going, but we are very optimistic on our business plans moving forward. I think the messages you received today are for us very meaningful. Therefore, a big thank you to my Board members because we have put a huge effort into this over the last couple of weeks, also thank you to Lutz. Welcome, Isabel. Thanks for coming, taking a day of vacation at [indiscernible] to spend the day with us and have a good return, and there really thanks for your interest and you continue to follow us in a positive manner. Thank you very much.