| Apu Gosalia

| VP Sustainability & Intelligence

| 22nd ICIS World Base Oils & Lubricants Conference

| Park Plaza Westminster Bridge | London | 22nd February 2018

Data, Digitalization, Decarbonization

– Do Disruptions Damage Durability?

.

01 ▪Data

02

03

▪Digitalization

▪Decarbonization

l 2

Data, Digitalization, Decarbonization– Do Disruptions Damage Durability

35.935.7

31.9

34.4

35.1 35.135.4 35.5 35.6 35.7

36.1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

l 3

*Million Tons / Without Marine Oils

DataDevelopment Global Lubricants Demand*

Asia Pacific

43% (35%)

North America

18% (22%)

Latin America9% (10%)

Eastern Europe

8% (10%)

Western Europe

11% (13%)

Africa6% (6%)

MiddleEast

5% (4%)

2017(2007)

l 4

45%54%

32%

27%

23% 19%

2007 2017

Demand (Million Tons)*

Asia-Pacific & MEA Americas Europe

36.135.9

*Without Marine Oils

DataDevelopment Regional Lubricants Breakdown

2017 : 2016

*Variance (%)

North America 0.0

Latin America -2.0

Western Europe 1.5

Eastern Europe 0.5

Middle East -0.5

Africa -3.0

Asia-Pacific 3.0

World 1.0

l 5

DataDevelopment Regional Lubricants Demand

*Rounded Up/Down

l 6

,0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2017 2007

DataRanking Top 20 Lubricant Countries*

*Thousand Tons

Germany14% (13%)

UK 10% (10%)

France 8% (9%)

Other Western Europe

23% (25%)

Other Eastern Europe

18% (16%)

Poland 4% (3%)

Ukraine 5% (5%)

Russia18% (19%)

2017(2007)

l 7

57%55%

43%

45%

2007 2017

Demand (Million Tons)*

Western Europe Eastern Europe

8.4

6.8

*Without Marine Oils

DataDevelopment European Lubricants Breakdown

l 8

DataUEIL Industry Statistics Committee

01 ▪Data

02

03

▪Digitalization

▪Decarbonization

l 9

Data, Digitalization, Decarbonization– Do Disruptions Damage Durability?

Digitization

• Automation of existingmanual or paper-basedprocesses …

• … enabled by the changeof information …

• … from an analogous to adigital format

Digitalization

• Use of digitized technologiesand digitized data for

generating revenue

improving, replacing and/or transforming processes

creating an environment to make digital business practices more effective

l 10

DigitalizationDigit(al)ization

l 11 ➢There is no Digitalization without Digitization!

DigitalizationDigit(al)ization

Digitization

• Automation of existingmanual or paper-basedprocesses …

• … enabled by the changeof information …

• … from an analogous to adigital format

Digitalization

• Use of digitized technologiesand digitized data for

generating revenue

improving, replacing and/or transforming processes

creating an environment to make digital business practices more effective

• Data collection throughout the whole value-chain will be widened

compared to todays standards

• Direct and automated usage of information generated at a later step of

the process will affect all steps before

• An extended exchange in between customer and lubricants company

will allow for new services and therewith add extra value to business

DigitalizationLubricant Value Chain

l 12

• Transform product development from being

empirically-driven to using data and simulation

approaches

• In doing so, application related information such as

field data or test field results serve as a statistical

backbone

• A more focused development will be granted by

implementing the later application into product

development by introducing simulation approaches

into R&D

DigitalizationLubricant Development Tools

l 13

DigitalizationLubricant Value Creation

Product Development

Production Sales DistributionAfter-Sales

Services

➢ Turn exclusively empiricalevidence driven productdevelopment into adigitally supportedproduct development

➢ Apply simulationapproaches and design ofExperiments (DoE)

➢ Use data to enhance theproduction of lubricants

➢ Use simulation tooptimize the location ofproduction

➢ Use data to predictfuture sales

➢ Introduce E-Commerce Tools

➢ Introduce Track &Trace of Deliveries

➢ Monitor fluids’ lifeand incorporate thisinformation into e.g.productdevelopment

l 14

Big & Smart Data

Data Usage & Analytics

Digital Business

Model Innovation

Sensor Technology

Development

Design of Experiments

Cyber Physical System

Simulation/Modelling

Condition Monitoring

Predictive Maintenance

Track & Trace Delivery

Drivers

DigitalizationDrivers

l 15

Third Party

Third Party

Third Party

Third Party

Third Party

Third Party

l 16

DigitalizationDisruptors

DigitalizationToday

l 17

DigitalizationTomorrow

l 18

DigitalizationThreat

l 19

01 ▪Data

02

03

▪Digitalization

▪Decarbonization

l 20

Data, Digitalization, Decarbonization– Do Disruptions Damage Durability?

l 21*FUCHS Production Locations 2014

DecarbonizationCorporate Carbon Footprint*

(in kilogramm CO2e per ton produced)

l 22

DecarbonizationCO2-Distribution Combustion Engine

Source: BMW / Status 2015

l 23Source: BMW / Status 2015

DecarbonizationCO2-Distribution E-Mobility

l 24

DecarbonizationLubricant Specification

▪ In 2016, the sustainability initiative NaSch* was

established as a working group in Germany

▪ Members: AVIA BANTLEON, FUCHS, ROWE,

KLÜBER LUBRICATION, ZELLER+GMELIN,

German Lube/Oil Associations VSI & UNITI

▪ Objective: Establish sustainability standards,

KPIs, benchmarks for the lubricants industry and

emphasize its value for society (image campaign)

▪ UEIL cooperation with NaSch* carrying sustainability

forward to the level of the European lubricants industry

l 25*Nachhaltigkeit Schmierstoffindustrie

DecarbonizationSustainability Initiative