Fuchs Defies Weak Currencies by Winning Market Share in Asia

Fuchs Petrolub SE, the world’s largest independent lubricant maker, won market share in Asia and Europe as demand growth compensated for lower euro revenue because of weaker emerging-market currencies.

The company has been seeing the positive effects of hiring more people, Chief Executive Officer Stefan Fuchs said today on a conference call with journalists. The preferred stock jumped the most in three months in Frankfurt trading.

Fuchs, based in Mannheim, Germany, today reiterated a full-year target of increasing earnings and sales after new factories in Yingkou, China, and Kaluga, Russia, opened in the last two months. The company has hired 101 workers since the beginning of the year in sales, as well as in research and development.

“Due to its niche market strategy and investments in new plants and new people, we assume Fuchs will gain further market share,” Martin Roediger, an analyst at Kepler Cheuvreux, said in a note to clients today. Roediger rates Fuchs buy.

Earnings before interest and tax gained 5.8 percent to 83.4 million euros ($112.7 million) in the third quarter. Sales were little changed at 468.7 million euros and net income increased 5.7 percent to 57.9 million euros.

Growth of existing businesses in the first nine months led to extra revenue of 39.6 million euros, which canceled out 39.8 million euros less in sales because of translation effects from weaker currencies such as the Brazilian real and the South African rand.

The preferred shares jumped as much as 4.4 percent, the biggest intraday gain since Aug. 2, to 62.04 euros. They were trading up 4 percent at 61.78 euros as of 10:34 a.m. local time. The stock has risen 9.7 percent this year, valuing the company at 4 billion euros.

Fuchs has said he’s seeking acquisitions to boost this year’s revenue increase beyond the “low single-digit percentage range” that the company is forecasting for organic growth.

The lubricant maker is majority owned by the Fuchs founding family.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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