This article first appeared on GuruFocus .
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Sales:EUR2 billion in H1 2026, an 11% increase year-over-year.
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EBIT:EUR260 million, up 24% (EUR51 million) from the prior year.
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Q2 EBIT:EUR135 million, a 34% increase year-over-year.
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Gross Margin:34.8%, broadly in line with the prior year period (34.7%).
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EBIT Margin:13%, compared with 11.6% last year.
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Free Cash Flow (before acquisitions):EUR61 million, below the prior year level of EUR81 million.
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Net Operating Working Capital:EUR910 million, driven by inflationary effects on inventory.
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Net Liquidity:Declined from EUR151 million at the end of 2025 to EUR13 million at the end of June.
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EMEA Sales:Increased by 11%, with EBIT up EUR16 million (14%).
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Asia Pacific Sales:Organic growth of 14%, with EBIT up EUR27 million (42%).
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Americas Sales:Increased by 7%, with organic growth of 13%.
Release Date: July 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Strong sales growth of 11% year-over-year, reaching EUR2 billion in H1 2026, driven by robust organic growth and high customer demand.
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EBIT increased by 24% to EUR260 million, with Q2 EBIT up 34% year-over-year, reflecting strong demand and improved profitability.
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Broad-based organic growth across all regions, with Asia Pacific and Americas showing particularly strong EBIT improvements of 42% and significant recovery, respectively.
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Effective management of raw material shortages and cost inflation through a broad sourcing network, enabling reliable customer supply and new customer acquisition.
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Raised full-year EBIT guidance to EUR460-480 million, reflecting confidence in continued strong performance despite market uncertainties.
Negative Points
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Free cash flow before acquisition declined to EUR61 million from EUR81 million, impacted by inflationary buildup of net operating working capital.
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A fire at the Saudi Arabian production site caused severe damage, with no production expected for the remainder of 2026, posing a risk to regional supply and earnings.
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Part of the sales growth is temporary, driven by pre-buying effects and customers switching from competitors, which is expected to reverse in H2 2026.
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Negative currency effects, particularly from the weaker US dollar, continue to burden results, though they are declining.
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Net liquidity dropped significantly to EUR13 million due to dividend payments, acquisition costs, and inflationary pressures, limiting financial flexibility.
Q & A Highlights
Q: Can you provide more details on the fire at the Saudi Arabian production site, its impact on the group, and the timeline for rebuilding? A: Stefan Fuchs (CEO) explained that the plant, which is more than 90% dedicated to supplying the Saudi Arabian market, suffered severe damage, with large parts destroyed. The company has secured alternative sourcing within the country and from the broader Fuchs Group. Rebuilding major parts of the plant will take over a year, extending into 2027. The financial impact is estimated at around 1.5% of group EBIT, which is not considered dramatic. Esma Saglik (CFO) clarified that Fuchs holds a 32% minority stake in the joint venture, and the decision to rebuild will be made jointly with the Alhamrani family, the majority partner.
Q: The guidance was raised last week, but the Saudi fire occurred after that. Is the guidance still achievable, and was it conservative to begin with? Also, what is the current visibility on Q3 demand and the sustainability of the temporary volume gains? A: Esma Saglik (CFO) confirmed the guidance remains unchanged, as the Saudi incident is not expected to have a material implication. Stefan Fuchs (CEO) stated that the company does not have a traditional order book and declined to comment on July performance, citing limited visibility. He reiterated that the first half's 11% sales growth was volume-driven across all regions. While some business gained from competitors' supply failures will be retained, not all of it will be kept, and quantifying the exact amount is difficult.
Q: Given the strong demand, are you still limiting customer pre-ordering, and are you able to gain market share from struggling competitors? A: Stefan Fuchs (CEO) noted that pre-buying is more prevalent in the automotive aftermarket than in industrial accounts, which lack storage capacity. The company still has availability but faces a daily battle to secure raw materials, particularly Group III base oils and polyalphaolefins. He praised the team's efforts in substituting ingredients and communicating with customers, emphasizing that the company's global footprint and collaboration are key advantages in the current environment.
Q: Are you still ahead of the curve in passing on higher input costs through price increases, or are you now running behind? A: Stefan Fuchs (CEO) explained that there is always a lag effect when raw material prices jump. He referenced the 2021-2022 period, where the company experienced a margin valley before recovering. He expects a similar pattern, with relative margins potentially dropping in the third quarter due to the magnitude of cost inflation. The situation remains dynamic, and the company is closely monitoring developments in the Middle East.
Q: What is your visibility into alternative raw material sourcing, and how will the temporary volume gains unwind in the second half? A: Stefan Fuchs (CEO) advised investors not to extrapolate the first half's performance into the second half. He expects the pre-buying impact to be equalized by year-end, with higher volumes in H1 offset by lower volumes in H2. The company has good visibility on raw material procurement due to long-term relationships and is not a spot buyer. He believes Fuchs can continue to supply customers, barring further escalation of the conflict.
Q: Are pricing mechanisms different across regions, and can you provide an update on the digital transformation program and its cost impact? A: Stefan Fuchs (CEO) stated that pricing mechanisms are not region-specific but vary by customer type. Large industrial and OEM customers, representing 25%-30% of business, are on price variation clauses, which were shortened from three months to one month after the COVID crisis. Esma Saglik (CFO) provided an update on the digital transformation, confirming the project is on track. The first go-live is planned for Mexico in March 2027, followed by the US in July. Costs are mostly capitalized this year, but localization costs will emerge next year, with benefits expected six months after each implementation.
Q: Was the net pricing effect in Q2 positive or negative when comparing price increases to input cost inflation? A: Esma Saglik (CFO) confirmed that the net pricing effect in Q2 was positive.
Q: Regarding the fire at the Yanbu site, was it a military attack, and will you rebuild regardless of the conflict's status? A: Stefan Fuchs (CEO) did not confirm the cause but stated that as a 32% shareholder, the decision to rebuild will be made jointly with the Alhamrani family. He expressed confidence in the country and region, assuming the plant will be rebuilt, but declined to speculate further beyond the published information.
Q: How significant is the data center cooling fluids business, and is Fuchs' technology applicable to all data centers? A: Stefan Fuchs (CEO) described the data center cooling business as not large today, with heavy competition. He noted that Fuchs is pursuing this area but sees better opportunities in other niches, such as the company's six focus areas. He cautioned that the business is not as significant as some might think.
Q: What is the profitability of the acquired OPET Turkey joint venture, and are there any one-off effects? Also, is the strong growth in Asian automotive driven by pre-buying or share gains? A: Esma Saglik (CFO) acknowledged one-off costs related to the acquisition and integration, which will not repeat in H2. The business is positive and significant in Turkey, though it operates in a high-inflation environment. Stefan Fuchs (CEO) stated that the growth pattern in Asia Pacific is not different from other regions, with no specific pre-buying effects. The strong Q2 organic growth of 21% in the region was broad-based.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
