Schouw & Co....2016/01/08 · Schouw & Co. at a glance 140 years of history 125 years in packaging 25 years as a conglomerate 5 big businesses today Since 1954 listed on the Danish

Schouw & Co.SEB Nordic Seminar

8 JANUARY 2016

CEO JENS BJERG SØRENSEN

Agenda08.01.2016SEB Nordic Seminar 2

Schouw & Co. How we manage the conglomerate and our return expectations

BioMar and Hydra-GreneStrategic update

Questions and discussions

20-25 minutes 15-20 minutes

Schouw & Co. at a glance

140 years of history 125 years in packaging

25 years as a conglomerate 5 big businesses today

Since 1954 listed on the Danish stock exchange

2014 revenue DKK 11.8bn EBIT 708m

Generates about 15% return on invested capital

4.500 employees in more than 20 countries

Financially strong debt free

Long-term main shareholder (industrial foundation)

8.5bn

1.8bn

1.2bn

4.9bn

0.5bn

BIOMARWorld’s third largest

manufacturer of quality feed for industrialised fish farming

FIBERTEX PERSONAL CAREWorld’s fifth largest manufacturer

of spunbond for hygiene

FIBERTEX NONWOVENSA leading European producer

of nonwovens for various industrial applications

KRAMP (20%)Europe’s by far largest supplier of parts and accessories for the

agricultural sector

HYDRA-GRENENordic leading in hydraulic components and solutions

2014 revenue in DKK

08.01.2016SEB Nordic Seminar 3

We build a portfolio of leading Danish industrial businesses and develop them through value-creating, active and long-term ownership


Strategic development08.01.2016SEB Nordic Seminar 5

2001

12.311.7

20142013

11.6

2006

7.4

2015

0.3

1988

2.2

DiversificationBigger and stronger portfolio

Bigger and stronger businesses

Consolidating the conglomerate

Revenue DKK billion

Active ownership at Schouw & Co.08.01.2016SEB Nordic Seminar 6

Businesses owned by Schouw & Co. should… secure and maintain a leading position

… develop after our active ownership model

… have a long-term growth strategy

… take part in value-creating consolidations

… generate ROIC above 15%

… have visible values and a strong culture

… be prepared for change

Strategic goals08.01.2016SEB Nordic Seminar 7

Growth Substantial growth every year

Profit Benchmark level profitability

Return ROIC > 15%, but dependent on level of risk

Leverage Comfort zone for NIBD is 1-2 times EBITDA

Payout Constant/increasing dividends and share buybacks

Portfolio A ’handful’ of big and strong businesses

Significant realised shareholder return08.01.2016SEB Nordic Seminar 8

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

14.9%16.9%

20.7%29.6%

36.6%

Note: Total Shareholder Return CAGR including re-invested dividends. End date 31.12.2015. Source: Datastream

BioMarCreating value from the Blue Revolution

Aquaculture and BioMar introduction

Aquaculture is a fundamental growth industry

Increasing global population increases the global demand for proteins.

Fish, and especially salmon, is healthy due to thehigh content of EPA/DHA (Omega 3).

Aquaculture feed conversion rate is very high (2-3 times better than poultry and pigs).

Wild-catch of e.g. salmon and seabass has been fairly constant in recent 30 years where industrialised fish farming has grown by 5-7% per year.

The only sustainable way to increase the supply of fish is by fish farming.


BioMar is in a strong strategic position

BioMar has a pure-play focus on feed for aquaculture and the only stock-listed high-value feed manufacturer.

Around ¾ of the feed is for salmon in the North Sea and Chile where BioMar is a Global #3 with a 20-25% market share.

BioMar manufactures feed for e.g. sea bass, sea bream, tilapia, portion trout and shrimp in Continental Europe, Costa Rica and China.

BioMar targets long-term profitable growth in both existing and new markets.

BioMar is currently expanding production capacity in Norway, and building JVs in Turkey and China.

BioMar Highlights after Q3

Flat revenue but decrease in volume Total volume down 7% - only in salmon markets

Effect from sea lice in Norway

Lower volume in Chile due to financial distress in the farming sector

Positive development in Greece

EBIT below same period last year Effect from lower volume

Competition is tough as expected

Increased focus on value-added products and margin management

Strong cash flow generation due to lower NWC

Development in Chile is challenging Very low salmon prices

Focus on receivables and debtor risk

BioMar’s 13.6% stake in Salmones Austral written down DKK 43m

Business development and outlook JV with Tongwei in China signed and building of new factory initiated

Revenue guidance lowered to DKK 8.75bn and EBIT narrowed/increased to 390-420m

Higher than normal uncertainty a.o. due to Chile


FINANCIAL HIGHLIGHTS 2015 Q3 UPDATE

Q3 last-twelve-months

2015 2014 D 2015 2014 D

Revenue 2,698 2,788 -3.2% 9,071 8,559 6.0%

EBITDA 215 223 -3.4% 585 595 -1.7%

- margin 8.0% 8.0% 0.0pp 6.4% 7.0% -0.5pp

EBIT 179 187 -4.1% 441 454 -2.7%

- margin 6.6% 6.7% -0.1pp 4.9% 5.3% -0.4pp

Profit before tax 123 180 -31.7% 360 429 -16.0%

CF operations 294 -80 n.a. 455 346 31.6%

Equity 1,991 1,922 3.6%

- in % of assets 40.1% 39.3% 0.7pp

Inv. Capital (ex gw) 2,041 2,133 -4.3%

- ROIC 21.8% 24.6% -2.8pp

Working Capital 1,116 1,128 -1.1%

- in % of revenue 12.3% 13.2% -0.9pp

NIBD 421 680 -38.0%

- x LTM EBIDTA 0.7x 1.1x -36.9%

Hydra-GreneTransformation and executingbigger-and-stronger strategy

Hydra-Grene until end of 2015

Hydraulic components and solutionsWind turbine manufacturers largest customer group

OEM and aftermarket in Denmark

Offshore oil and gas small but growing

Revenue of about DKK 550m and +10% EBIT

Increase in sales to wind turbine industrySub-supplier margins are under pressure

Lower visibility in wind turbine industry

Hydra-Grene supplies many wind customers

Strategic outlookWish to reduce high exposure to wind turbine industry

Ambition of DKK 1bn revenue requires M&A


Hydra-Grene’s acquisition of Specma

Specma at a glanceA leading Nordic hydraulics and fluid

conveyance application provider with strong geographical presence

Revenue of SEK 1.3bn (DKK +1.0bn)Two business areas Global and Nordic Global Division, about ¾ of sales, serves

primarily large OEMs in the global market

Nordic Division, about ¼ of sales, targets smaller OEMs and aftermarket customers in the Nordic region

A very good matchCombining Hydra-Grene and Specma

fulfills the year-long strategy of Nordic consolidation in both businesses

Synergies primarily within procurement/sourcing and cross sales opportunities

14

Deal multiples (2015 FY outlook)8.2x EBITDA (expected about SEK 100m)

10.2x EBIT (expected about SEK 80m)

Will meet target of 15% ROIC within 2-3 years

Hydra sites Specma sites

Strong strategic rationale in acquiring Specma

TotalWindOtherEnginee-ring

Agricul-ture

Denmark Total VehiclesSweden Material handling

Finland

Hydra

Specma

Nordic Global

National customersSmall seriesSignificant aftermarket

Global customersLarge series and customisationLimited aftermarket

Strategic rationale

Unique match between products and competences

Highly complementing customer segments

Broad geographical presence

Reduction of Hydra-Grene’s exposure to the wind turbine industry

Strong platform for future growth

Economies of scale and synergies

Limited risks


2015 outlook

REVENUE DKK million

2015 F

after Q3

2015 F

original

2014

actual

BioMar c. 8,750 c. 8,500 8,451

Fibertex Personal Care c. 1,800 c. 1,700 1,787

Fibertex Nonwovens c. 1,200 c. 1,200 1,048

Hydra-Grene c. 575 above 500 566

Other/eliminations - - -68

Total revenue c. 12.3bn c. 12bn 11,784

Kramp (100%) c. 5,250 c. 5,250 4,905

EBIT DKK million

2015 F

after Q3

2015 F

original

2014

actual

BioMar 390-420 360-410 434

Fibertex Personal Care 220-230 160-180 171

Fibertex Nonwovens 75-85 65-75 62

Hydra-Grene 65-70 45-55 60

Other c. -20 c. -20 -20

Total EBIT 730-785 610-700 708

Associates etc. c. 80 60-70 28

Financial items, net c. -65 c. -35 -35

Profit before tax 745-800 635-735 701

Kramp EBIT (100%) c. 450 425-450 405


Upwards adjusted after Q1Upwards adjusted after Q2Down/upwards adjusted after Q3

Summing up08.01.2016SEB Nordic Seminar 17

Growth Substantial growth every year

Profit Benchmark level profitability

Return ROIC > 15%, but dependenton level of risk

Leverage Comfort zone for NIBD is 1-2 times EBITDA

Payout Constant/increasing dividends and share buybacks

Portfolio A ’handful’ of big andstrong businesses

STRATEGIC GOALS A STRONG PORTFOLIO

BioMar blue revolution | non-GDP cyclical | growth in existing/new markets

Fibertex Personal Care demand for hygiene | double-digit growth in Asia

Fibertex Nonwovens emerging markets infrastructure | automotive growth

Hydra-Grene strong Nordic base | growth in Global accounts | Specma gives scale

Kramp absolute #1 in Europe | agro grows in Eastern Europe | strong in mature markets

Contact

Investor Relations CEO/President

Kasper Okkels Jens Bjerg Sørensen

[email protected]

+45 86 11 22 22

Appendix

Fibertex Personal Care

Spunbond for hygieneRolls of fabrics used in baby diapers,

femcare and adult incontinence

Global #5 with ~15% market share

Stabile European marketAlmost 100% penetration

Growth from product innovation

Significant growth in AsiaMiddle class is growing

Increased penetration/use of hygiene products

Asian market is volatile and market dynamics not as established Europe

Differentiation importantInnowo Print (leading in direct

nonwoven print) 100% owned

Internationalisation of print technology

Investment in softer and lighter products

20.11.2015Nordea Markets Aalborg 20

Back sheet Print

Leakage barrier

Top sheetCore wrap

Leg cuff

Ears

Fibertex Nonwovens

Leading in Europe in industrial nonwovens Many product applications

Needle punching and spunlacing technology

State-of-the-art technology

Customer groupsAuto; part of the construc-

tion and as a ‘cheap fabric’

Construction; e.g. for infrastructure and composites

Industry; e.g. furniture, bedding and other cyclical businesses

Executing turnaround and growth plansTechnological and market

driven profitable growth

Not yet at profitability target

Growth and consolidation remains high on the agenda


Building Composites

Geotextiles Concrete

Bedding Flooring

Furniture Acoustics

Hood insulation Trunk carpets

Parcel trays Wheel housing

2015 majority

2014

2015

2011

2004

RevenueLTM

EBITLTM

Kramp

Leading European supplier of spare parts and accessories for the agricultural sector#1 in BeNeLux, Germany, Poland and Nordic

countries

9 central warehouses covering 22 European countries

20% ownership in Kramp from Grene merger in 2013

Strategic agendaContinue integration and harvesting synergies

Expanding product ranges and growth through partnerships

Margin improvement and best practices

Optimizing working capital (stockturn)


06 07 08 09 10 11 12 13 14

Xergi

Turnkey biogas plants European leading manufacturer of large-scale turn-key

biogas plants Leading in technology Main markets in Denmark, UK and France 50/50 joint venture with Danish nature/environment

company Hedeselskabet

Renewable energy Global demand for energy continues to increase Biogas created from manure and waste is among the

most promising sources of renewable energy

Current trading Significant progress in 2015 with high level of activity Effect from many years of investing in technology and

markets as well as strong Danish market Unchanged good long-term prospects for biogas Focus on entering international markets


STRATEGIC UPDATE FINANCIALS

BIOGAS PLANT FLOWCHART

06 07 08 09 10 11 12 13 14

Revenue Operating profit

Schouw & Co....2016/01/08 · Schouw & Co. at a glance 140 years of history 125 years in packaging 25 years as a conglomerate 5 big businesses today Since 1954 listed on the Danish

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