Profit-Planet-People– How Sustainability Reshapes the

Lubricants Industry

Apu GosaliaHead Global Competitive Intelligence / Chief Sustainability Officer

The Annual Congress of the European Lubricant Industry / Malta, 21-23 October 2015

FUCHS PETROLUB SE

Global & European Lubricants Market

Competitive Landscape

Sustainability

AgendaProfit-Planet-People – How Sustainability Reshapes the Lubricants Industry

2

FUCHS PETROLUB SE

35.635.435.135.2

35.836.0

34.5

32.0

2007 2008 2009 2010 2011 2012 2013 2014

*Without Marine Oils

Global & European Lubricants MarketDevelopment Global Lubricants Demand (Million Tons)*

3

FUCHS PETROLUB SE

46%53%

31%28%

23% 19%

Asia-Pacific & MEA Americas Europe

North America

19% (21%)

Asia-Pacific42% (35%)

Middle East5% (5%)

Africa6% (6%)

Eastern Europe

9% (10%)

Latin America9% (10%)

Western Europe

10% (13%)

Demand(Million Tons)*

36.0 35.6

4

Global & European Lubricants MarketDevelopment Regional Lubricants Breakdown

2014(2007)

*Without Marine Oils

FUCHS PETROLUB SE5

Global & European Lubricants MarketDevelopment Regional Lubricants Demand

2014 : 2013Variance (%)

North America 1.4

Latin America -1.4

Western Europe -1.0

Eastern Europe -4.5

Middle East 4.0

Africa 1.1

Asia-Pacific 1.3

World 0.4

FUCHS PETROLUB SE

0

5

10

15

20

North

Amer

icaW

ester

n Eur

ope

Midd

le Eas

tEas

tern

Europ

eLa

tin A

mer

icaAsia

-Pac

ific

Africa

Wor

ldKG

6

Global & European Lubricants MarketRegional Per-Capita Lubricants Demand 2014

FUCHS PETROLUB SE

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

China

USAIndia

Russia

Japa

nBra

zilGer

manyKore

a

Iran

Indonesia

Mexico UK

Canad

aFra

nce

Thailand

Taiwan

Turkey

Australia

Egypt

Saudi A

rabia

KT

7

Global & European Lubricants MarketRanking Top 20 Lubricant Countries 2014

FUCHS PETROLUB SE

Russia 20% (19%)

Other Western

Europe 22% (25%)

France 8% (9%)

UK 10% (10%)

Germany 15% (13%)

Poland 4% (3%)

Other Eastern

Europe 16% (16%)

Ukraine 5% (5%)

FUCHS PETROLUB SE88

55%57%

45%

43%

Western Europe Eastern Europe

Demand(Million tons)*

8.4

6.8

2014 (2007)

*Without Marine Oils

Global & European Lubricants MarketDevelopment Country Lubricants Breakdown

FUCHS PETROLUB SE

Global & European Lubricants Market

Competitive Landscape

Sustainability

9

AgendaProfit-Planet-People – How Sustainability Reshapes the Lubricants Industry

FUCHS PETROLUB SE

590

200 180130

1,500

1,200

mid-90s 2000 2005

"Independents"

"Majors"

Competitive LandscapeStructure Global Lubricants Industry*

10 *Number of Players > 1,000 tons

FUCHS PETROLUB SE

Competitive LandscapeM&A Deals Global Lubricants Sector

11

0

5

10

15

20

25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FUCHS PETROLUB SE

Competitive LandscapeRanking Top 20 Lubricants Manufacturers*

12

SHELL

EXXON MOBIL BP

TOTALCHEVRON

PETROCHINA

SINOPEC

IDEMIT

SUFUCHS

PETRONASLU

KOIL

JX H

OLDIN

GSVALV

OLINE

GULF O

ILPERTAM

INA

GAZPROM NEFT

PHILLI

PS 66

INDIA

N OIL

HINDUSTAN P

ETROLEUM

PETROBRAS

*By Volume

FUCHS PETROLUB SE

Competitive LandscapeDriving Forces

Competitive Landscape

VerticalDiversification

Retraction fromNiches

Globalization of NOCs

Restructuring of Majors

New MarketParticipants

Private Equity

1313

FUCHS PETROLUB SE

Global & European Lubricants Market

Competitive Landscape

Sustainability

14

AgendaProfit-Planet-People – How Sustainability Reshapes the Lubricants Industry

FUCHS PETROLUB SE

Internal Drivers

� Mission Statement

� Competitiveness

� Credibility

� Employee Loyalty

� Efficiency Enhancement

� Capital Access

� Employer Branding

� Quality Improvement

External Drivers

� Code of Responsible Conduct

� Shareholders

� Customers

� Suppliers

� Society

� Government / NGOs

� Media

� Future Generations

15

SustainabilityFUCHS Drivers

FUCHS PETROLUB SE

SustainabilityFUCHS Framework

16 Source: Graduate School Rhein-Neckar

FUCHS PETROLUB SE

Sustainability

ShareholderValue

Raw Materials:Suppliers / Supply

External: Society

Finished Lubricants:Production / Products

Stakeholder Value

Internal: Employees

Economic SocialEcological

17

Sustainability FUCHS Responsibility

17

FUCHS PETROLUB SE

External Availability:

� Declaration of Corporate Governance

� Compliance Management System

� Code of Conduct

� Global Diversity Guideline

� Anti Corruption Guideline

� Antitrust Law Guideline

� Health & Safety Guideline

Reasons:

� Internal communication of sustainability topics in the FUCHS Group

� Simplified answering to external questionnaires of customers, etc.

Sustainability Guideline

18

SustainabilityFUCHS Guidelines

FUCHS PETROLUB SE

19

Supply- Do you incorporate sustainable procurement into

your supply chain?

Wessex Water / December 2010

FUCHS PETROLUB SE

� In a first step our Key Suppliers across theglobe were approached in writing to complywith the FUCHS Code of Conduct and theFUCHS Sustainability Guideline (2013)

� We received a 100% response rate from them,mostly referring to their own codes/guidelines, in some cases even signing to ours (2014)

� In a next step we started to get the samefrom our centrally managed and importantlocal suppliers �

� We also established a Guideline for evaluationof new suppliers

�

�

20

�

SustainabilityFUCHS Suppliers

FUCHS PETROLUB SE

Production: Energy & Carbon- Did you reduce energy consumption in the last

years? - Do you have energy reduction targets? - Do you calculate the carbon footprint associated

with the production of goods?Wessex Water / December 2010

FUCHS PETROLUB SE

SustainabilityFUCHS Ecological Sustainability KPIs

22

FUCHS PETROLUB SE23

SustainabilityFUCHS Carbon Footprint

Source: FutureCamp

FUCHS PETROLUB SE

SustainabilityFUCHS Scope 3 Calculation

Source: EVONIK24

FUCHS PETROLUB SE

Production: Water & Waste- Do you have water reduction features installed

in your facilities and/or buildings? - Do you have any initiatives in place to reduce

the amount of waste you produce?Wessex Water / December 2010

FUCHS PETROLUB SE

GreasereactorCold tab water Hot tap water to the sewage

Buffer tank for water

Grease reactor

Grease reactor

Buffer tank for water

Mixer for product with

water

Cold tab water Hot tap water to the sewage

Cold tab water Hot tap water to the sewage

Stage I

Stage II

Stage III

26

Sustainability FUCHS Water Reduction

26

FUCHS PETROLUB SE

� Manufacturing and storage tanks characterized by: plain interior surface, external heating coils, cone bottom for better flow of oil

� Inlying loop, which descends automatically after drain and cleans the tank wall using compressed air

Waste reduction – Tank cleaning with compressed air

27

Sustainability FUCHS Waste Reduction

27

FUCHS PETROLUB SE

Employees- Was your staff turnover less than 10% in the

past 12 months?- During the last months, were there any

industrial accidents? Wessex Water / December 2010

Fiat / January 2014

FUCHS PETROLUB SE29

Sustainability FUCHS Social Sustainability KPIs

29

FUCHS PETROLUB SE

Society- Are you committed in community initiatives?

Fiat / January 2014

FUCHS PETROLUB SE

15

31

Other

Corporate Foundations

Corporate Volunteering

Sponsorship

Corporate Giving

Science

Politics

Culture

Sports

Environment

Poverty

Health

Education

Sustainability FUCHS Corporate Citizenship

FUCHS PETROLUB SE

SustainabilityFUCHS Commitment

32

FUCHS PETROLUB SE

“Honey Spot“Eco-Efficiency

Socio-Efficiency

Sufficiency

SustainabilityFUCHS Ambition

33

FUCHS PETROLUB SE

Economic Impact

� Reduced turnover & margin

� Pressure to reduce prices

� Loss of market share

� Liability for damages

� Investigation costs

� Legal costs Social Impact

� Loss of employment

� Health & Safety

SustainabilityCounterfeiting

34

Ecological Impact

� Environmental damage

FUCHS PETROLUB SE35

SustainabilityThe Final Frontier

Source: Happy Planet Index Ecological Footprint

Malta � 4 planets