Schouw & Co.ABG Sundal Collier Small & Midcap Seminar
16 APRIL 2015
VP BUSINESS DEVELOPMENT, STRATEGY & IR KASPER OKKELS
Schouw & Co. at a glance16.04.2015ABG small & midcap seminar 2
BIOMARThe World’s third largest
manufacturer of quality feed for industrialised fish farming
FIBERTEX PERSONAL CAREThe World’s fifth largest producer
of spunbond for hygiene
FIBERTEX NONWOVENSLeading European manufacturer of
nonwovens for industrial applications
KRAMP (20%)The absolute largest supplier in
Europe of accessories and parts for farming
HYDRA-GRENELeading in Denmark within hydraulic
components and solutions
140 years of history 125 years in packaging
25 years as a conglomerate 5 major investments
Listed on Nasdaq Copenhagen since 1954
2014 revenue DKK 11.8bn EBIT 708m
About 15% return on invested capital
4.500 employees in more than 20 countries
Strong balance sheet virtually no debt
Long-term major shareholder
8.5bn
1.8bn
1.2bn
4.9bn
0.5bn
2014 reveue i DKK
We build a portfolio of leading Danish industrial businesses and develop them through value-creating, active and long-term ownership
No divestments of core businesses
Even bigger and stronger businesses
Further developthe portfolio
Open to value-creating ownership structures
16.04.2015ABG small & midcap seminar 3
Strong track-record
Revenue
12.0%Revenue CAGR 2010-2014 adjusted for sale of Martin and Grene
EBIT
16.2%EBIT CAGR 2010-2014 adjusted for sale of Martin and Grene
ROIC ex. goodwill
16.9%Growth in ROIC five years in a rowROIC incl. goodwill 14.0%
Reduction in NIBD
2.1bn2010-14 reduction due to strong CF, and effect from Vestas, Lerøy, Martin, Grene
Free Cash Flow
1.5bnAccumulated FCF incl. M&A 2010-2014 Operating CF 2010-2014 CAGR 15,5%
Shareholder yield
solidDividends increased every recent 4 years2010-2014 total share buyback 410m
16.04.2015ABG small & midcap seminar 4
All graphs are LTM and adjusted for the sale of Martin Professional and the financial effect from the combination of Grene and Kramp
Strategic goals16.04.2015ABG small & midcap seminar 5
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
Looking towards 2020
Group highlightsSignificant and strong
businesses in the portfolio
Good momentum but still room for improvement
New activity in the portfolio under the right circumstances
Likely the strongest platform in 137 years of company history
Ambitious targets do not fulfill themselves
Global sizeActive participation in M&A
to drive consolidations
Geographical expansion in attractive growth markets
Operational streamliningSignificant investments will form
the basis for solid organic growth
Margin management to improve EBIT and generate significant cash flow
16.04.2015ABG small & midcap seminar 6
A very short updateon our businesses
BioMar16.04.2015ABG small & midcap seminar 8
Atlantic salmon, trout Atlantic salmon, coho, trout, tilapia
Sea bass, sea bream, portiontrout, eel, a.o.
Shrimp, tilapia, trout, sturgeon, turbot, catfish, pangasius, etc.
Market size ~2.0m tMarket growth* 5-6%Market share 20-25%
Market size ~1.4m tMarket growth* 5-6%Market share 25-30%
Market size ~0.7m tMarket growth 0-1%Market share 25-30%
Market size +10m tMarket growth 4-5%Market share -
*Long-term market growth over the ‘salmon cycle’; flat/negative volume development in 2015
NORTH SEA AMERICAS CONTINENTAL EUROPE ASIA
Profitable customers, high fish prices, limited short-term growth
Competition intense
Marine Harvest vertically integrated
Challenging farming environment
Feed players strong
Costa Rica as planed
Startup in shrimp feed
Running smoothly
Challenges in the Mediterranean Area
Realising pledges
Startup in Turkey
The largest farming region in the world
Feed quality low
Focus on partnerships with Asian businesses
Fibertex Personal Care
Stabile European market Almost 100% penetration
Growth from product innovation
Significant growth in Asia Middle class is growing
Increased penetration
Increased competition in Malaysia Pressure on prices
Decline in volume
Innowo Print 100% owned Leading in direct nonwoven print
Internationalisation
Differentiation important
Outlook Very volatile raw material prices
Guidance at 2014 levels
16.04.2015ABG small & midcap seminar 9
Fibertex Nonwovens
Leading in Europe in industrial nonwovens Many product applications
Needle punching and spunlacing technology
State-of-the-art technology
Customer groups Auto; 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 plans International acquisitions
in 2011, 2014 and 2015
Not yet at target
Growth and consolidation remains high on the agenda
Outlook 2015 will be a transition year
New capacity required
Effect from expansion in USA and South Africa
16.04.2015ABG small & midcap seminar 10
Building Composites
Geotextiles Concrete
Bedding Flooring
Furniture Acoustics
Hood insulation Trunk carpets
Parcel trays Wheel housing
RevenueLTM
EBITLTM
Hydra-Grene
Hydraulic components and solutions Wind turbine manufacturers largest customer group
OEM and aftermarket in Denmark
Offshore oil and gas small but growing
Increase in sales to wind turbine industry Sub supplier margins are under pressure
Lower visibility in wind turbine industry
Hydra-Grene supplies many wind customers
Outlook Setback in wind in 2015 but growth in offshore
2015 guidance below 2014 levels
16.04.2015ABG small & midcap seminar 11
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
Outlook Continue integration and harvesting synergies
Expanding product ranges and growth through partnerships
Margin improvement and best practices
Optimizing working capital (stockturn)
2017 ambition revenue EUR 1bn and 13% EBITDA
16.04.2015ABG small & midcap seminar 12
Nine distribution centers covers 22 European countries. Former Kramp in blue, former Grene in orange and Russian JV in turquoise
Q&A
Appendix2014 Full Year Presentation
2014 at a glance: A good, solid year
revenue
11.8bnGrowth 1.2% // 2013: 11.6bnIncrease in activity in all businesses
EBIT
708m12% growth from comparable level in 201313m up due to payment on impaired receivable
cash flow from operations
628m2013: 667mFree cash flow 273m
NIBD/EBITDA
0.0xInsignificant increase in NIBD compared to 2013Dividends 153m // share buyback 180m (gross)
acquisitions
2 bolt-onFibertex Nonwovens: Platform in USAFibertex Personal Care: Printing on nonwovens
return on invested capital
16.9%ROIC incl. goodwill 14.0%Growth in ROIC five years in a row
16.04.2015ABG small & midcap seminar 15
200
220
240
260
280
300
320
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Schouw & Co. share priceC20 CAP indexed to Schouw & Co.MidCap indexed to Schouw & Co.
2014 2015
Key figures
Revenue and income 2014 2013
Revenue 11,784 11,645
EBITDA 1,070 1,039
- margin 9.1% 8.9%
EBIT 708 685
- margin 6.0% 5.9%
Value adjustment of financial investments 0 499
Cash flows 2014 2013
Cash flows from operating activities 628 667
Cash flows from investing activities -355 522
Of which investment in PPE -233 -346
Cash flows from financing activities -563 -687
Invested capital and financing 2014 2013
Working capital 1,775 1,424
Net interest bearing debt (NIBD) 44 -23
Total equity 6,074 5,746
ROIC excl. goodwill 16.9% 16.1%
ROIC incl. goodwill 14.0% 13.3%
NIBD/EBITDA 0.0 0.0
30%increase in share price
in 2014
16.04.2015ABG small & midcap seminar 16
BioMar
2014: Strong first half Modest increase in volumes, driven by Chile
EBIT increased due better than expected finish of the year
Unexpected payment lowered need for provisions by 13m
Fairly unchanged market shares throughout the year
Still pressure in salmon markets Region North Sea remains very competitive
Biology and salmon prices in Chile continues to be an issue
Strategy intact: Seeking growth in new markets/species
Moderate 2015 outlook Competition remains intense in key markets
Still uncertainty in southern Europe, especially Greece
No market growth anticipated
16.04.2015ABG small & midcap seminar 17
2014 highlightsVolume +1.6%Revenue –2.9%EBIT +10.2%
Revenue2013 8.7b2014 8.5b2015 ~8.5b
EBIT2013 394m2014 434m2015 360-410m
ROIC (ex gw)2013 20.1%2014 22.9%
RevenueLTM
EBITLTM
BioMar 2014-Q4 financials16.04.2015ABG small & midcap seminar 18
Q4 YTDLTM 2013
2014 2013 D 2014 2013 D
Revenue 2.234 2.341 -5% 8.451 8.702 -3% 8.451 8.702
EBITDA 169 190 -11% 574 538 7% 574 538
EBITDA% 7,6% 8,1% -7% 6,8% 6,2% 10% 6,8% 6,2%
EBIT 135 155 -13% 434 394 10% 434 394
EBIT% 6,0% 6,6% -8% 5,1% 4,5% 13% 5,1% 4,5%
Profit before tax 117 147 -21% 398 372 7% 398 372
Cash Flow from operations 262 342 -23% 266 373 -29% 266 373
Equity 1.902 1.765 8% 1.765
- in % of total assets 39,3% 38,9% 1% 38,9%
Inv. Capital (ex goodwill) 1.931 1.720 12% 1.720
- ROIC 22,9% 20,1% 14% 20,1%
Net Working Capital 983 741 33% 741
- in % of LTM revenue 11,6% 8,5% 37% 8,5%
NIBD 386 353 9% 353
- times LTM EBIDTA 0,7x 0,7x 2% 0,7x
Fibertex Personal Care
Growth from new capacity Volume growth driven by Malaysia
Over capacity and pressure on sales prices
Seamless running in of 4th production line in Malaysia
Better than expected capacity utilisation in Danish factory
Strong regional player Top 3 position in Europa and South East Asia
Operational excellence and innovation is mandatory
Acquisition of Innowo Print gives competitive edge
Consolidation in 2015 Internal optimization and focus on efficiency
New capacity to be installed – but not in 2015
Positive EBIT effect from falling raw material prices in Q1likely offset later in the year
2015 guidance around 2014 level
16.04.2015ABG small & midcap seminar 19
2014 highlightsVolume +11%Revenue +15%EBIT +5%
Revenue2013 1.6b2014 1.8b2015 ~1.7b
EBIT2013 164m2014 171m2015 160-180m
ROIC (ex gw)2013 13.6%2014 14.4%
RevenueLTM
EBITLTM
Fibertex Personal Care 2014-Q4 financials
Q4 YTDLTM 2013
2014 2013 D 2014 2013 D
Revenue 485 375 29% 1.787 1.554 15% 1.787 1.554
EBITDA 90 71 28% 308 288 7% 308 288
EBITDA% 18,6% 18,9% -1% 17,2% 18,6% -7% 17,2% 18,6%
EBIT 51 40 28% 171 164 4% 171 164
EBIT% 10,5% 10,6% -1% 9,6% 10,6% -9% 9,6% 10,6%
Profit before tax 59 39 52% 169 157 8% 169 157
Cash Flow from operations 30 -5 #### 226 208 8% 226 208
Equity 730 635 15% 635
- in % of total assets 38,8% 38,9% 0% 38,9%
Inv. Capital (ex goodwill) 1.336 1.192 12% 1.192
- ROIC 14,4% 13,6% 6% 13,6%
Net Working Capital 293 247 19% 247
- in % of LTM revenue 16,4% 15,9% 3% 15,9%
NIBD 688 644 7% 644
- times LTM EBIDTA 2,2x 2,2x 0% 2,2x
16.04.2015ABG small & midcap seminar 20
Fibertex Nonwovens
Continuing positive momentum Strong growth in high-value segments
Substantial progress in EBIT
Effect from high volume and transformed business model
Leading in Europe – international focus State-of-the-art equipment at all sites
Strong platform in US following acquisition
Increased ownership stake in Fibertex South Africa
Promising pipeline; strong product development
2015 will be a transition year Upgrading technology and installing new capacity
Consolidation of South Africa (negative EBIT)
Uncertainty about raw material prices
16.04.2015ABG small & midcap seminar 21
2014 highlightsRevenue +12%EBIT +67%Turnaround completed
Revenue2013 932m2014 1,048m2015 ~1,200m
EBIT2013 37m2014 62m2015 65-75m
ROIC (ex gw)2013 5.1%2014 8.4%
RevenueLTM
EBITLTM
Fibertex Nonwovens 2014-Q4 financials
Q4 YTDLTM 2013
2014 2013 D 2014 2013 D
Revenue 262 218 20% 1.048 933 12% 1.048 933
EBITDA 28 23 20% 128 102 26% 128 102
EBITDA% 10,6% 10,6% 0% 12,2% 10,9% 12% 12,2% 10,9%
EBIT 9 7 25% 62 37 67% 62 37
EBIT% 3,4% 3,2% 4% 5,9% 4,0% 49% 5,9% 4,0%
Profit before tax 5 3 98% 50 17 189% 50 17
Cash Flow from operations 13 12 6% 82 58 43% 82 58
Equity 385 314 23% 314
- in % of total assets 32,7% 32,4% 1% 32,4%
Inv. Capital (ex goodwill) 874 755 16% 755
- ROIC 8,4% 5,1% 63% 5,1%
Net Working Capital 319 285 12% 285
- in % of LTM revenue 30,4% 30,6% -1% 30,6%
NIBD 522 452 15% 452
- times LTM EBIDTA 4,1x 4,4x -8% 4,4x
16.04.2015ABG small & midcap seminar 22
Hydra-Grene
Strong 2014 following high activity in wind Wind account for more than 40% of sales Effect from good utilisation of capacity Strong foothold in Danish OEM market
Developing the business Increasingly complex products and system solutions New ERP system implemented Wind turbine development projects, e.g. V164 Offshore segment gradually becoming a ‘third leg’
Lower activity in 2015 Lower sales to the wind turbine sector Increased international competition Variations in sales during the year Most industry/OEM stable, but agro-OEM sales down
16.04.2015ABG small & midcap seminar 23
2014 highlightsRevenue +18%EBIT +30%High activity in wind
Revenue2013 480m2014 566m2015 >500m
EBIT2013 46m2014 60m2015 45-55m
ROIC (ex gw)2013 18.2%2014 22.6%
RevenueLTM
EBITLTM
Hydra-Grene 2014-Q4 financials
Q4 YTDLTM 2013
2014 2013 D 2014 2013 D
Revenue 138 117 18% 566 480 18% 566 480
EBITDA 15 15 -1% 78 64 21% 78 64
EBITDA% 10,7% 12,7% -16% 13,8% 13,4% 3% 13,8% 13,4%
EBIT 10 7 60% 60 46 31% 60 46
EBIT% 7,6% 5,6% 36% 10,6% 9,6% 11% 10,6% 9,6%
Profit before tax 11 5 98% 61 40 52% 61 40
Cash Flow from operations 40 20 98% 60 64 -6% 60 64
Equity 188 167 12% 167
- in % of total assets 48,0% 41,4% 16% 41,4%
Inv. Capital (ex goodwill) 292 292 0% 292
- ROIC 22,6% 18,2% 24% 18,2%
Net Working Capital 187 172 8% 172
- in % of LTM revenue 33,1% 36,0% -8% 36,0%
NIBD 96 127 -24% 127
- times LTM EBIDTA 1,2x 2,0x -37% 2,0x
16.04.2015ABG small & midcap seminar 24
Kramp
2014: Growth in a difficult market Many agro customers facing difficulties
Kramp’s business model robust: high share of wearables and repair parts
Strong volume growth in Russia – but negative effect from weak RUB
Consolidating the merger Integration of organization, sales forces, procurement, etc.
Dual brand strategy in Poland implemented
Streamlining of assortment and product offering
Good outlook for 2015 Revenue forecasted to grow more than 5%, EBIT minimum the same
Recognised in Schouw & Co. as associate after tax at 55-65m
Synergies continues to materialise
16.04.2015ABG small & midcap seminar 25
2014 highlightsRevenue +7%EBIT +16%Progress in all countries
Revenue2013 4.6b2014 4.9b2015 ~5.25b
EBIT2013 349m2014 405m2015 425-450m
Other activities
Xergi Significant progress in 2014
Revenue up 52% to 311m (100%)
EBIT (for 100%) 13m (2013: 2m)
Maintaining high activity level also in 2015
Effect from many years of investing in technology and markets as well as strong Danish market
Unchanged good prospects for biogas
Incuba Invest Small deficit in 2014
Navitas Science Park commissioned in Q3
16% ownership in Capnova
Properties HQ at Chr. Filtenborgs Plads in Aarhus
Two factories in Frederikshavn (Martin Prof.)
Small property in Aarhus rented to former Grene Industri-service
16.04.2015ABG small & midcap seminar 26
2015 guidance
REVENUE DKK million
2015
forecast
2014
actual
2013
actual
BioMar c. 8,500 8,451 8,702
Fibertex Personal Care c. 1,700 1,788 1,554
Fibertex Nonwovens c. 1,200 1,048 933
Hydra-Grene above 500 566 480
Other/eliminations - -68 -24
Total revenue c. 12bn 11,784 11,645
Kramp (100%) c. 5,250 4,906 4,594
EBIT DKK million
2015
forecast
2014
actual
2013
actual
BioMar 360-410 434 394
Fibertex Personal Care 160-180 171 164
Fibertex Nonwovens 65-75 62 37
Hydra-Grene 45-55 60 46
Other c. -20 -20 43
Total EBIT 610-700 708 685
Associates etc. 60-70 28 -22
Financial investments - 0 499
Other financial items c. -35 -35 -53
Profit before tax 635-735 701 1,109
Kramp EBIT (100%) 425-450 405 349
16.04.2015ABG small & midcap seminar 27
AppendixSelected introductory presentation material
Merger
Grene/Kramp
Merger
NEG/Vestas
M&A activity16.04.2015ABG small & midcap seminar 29
MartinEV: 500m60+40%
2000 2002 2004 2006 2008 2010 2012 2014
SchulstadEV: 2.700m
62%
FibertexEV: 660m
100%
ProvimiEV: 675m
100% (BioMar)
TharreauEV: 300m
100% (FIN)
ElopakEV: 1.200m
50%
SjøtrollEV: 1.200m
51%
Hydro-power
MartinEV: 900m
100%
Merger
Xergi
BioMarEV: 1.800m68%+32%
GreneIndustri-service
NWSEV: 150m
100% (FIN)
InnowoEV: 100m85% (FPC)
Bigger and stronger portfolio
Bigger and stronger businesses in the portfolio
Consolidating theconglomerate
Deal flow is not a target
Acquisitions and mergerspart of consolidation
and to create bigger and stronger businesses
Divestments due to no longer being best owner
The Schouw agenda16.04.2015ABG small & midcap seminar 30
Develop big and strong businesses
Leading companies do perform better
Expand in growth markets
A global outlook is key
Constantly increase capacity
Balancing profit and growth
Maintain focus on innovation
Secure #1 positions
Think long-term
Ensuring high return on capital
Attract talent
“Results are created through people”
Conglomerate value creation16.04.2015ABG small & midcap seminar 31
FOCUSED OPERATIONS TRANSFORMATION
STRUCTURE AND DEVELOP OPTIMIZE OWNERSHIP
Delivering solid performance and growthTight/optimal capital allocationOngoing efficiencyEnsure innovation
Structural and strategic initiativesDevelopment of products and servicesGeographical expansionBolt-on acquisitions
Attractive acquisitionsLong-term planningAdd Schouw DNASecure leading positions
Necessary exits with good timingParticipate in value-added consolidationsConsider mergers, JVs, minority stakesValue-creating ownership structures
minimum as benchmark ambitious plans
risk and span of control best owner philosophy
Bu
sin
ess
leve
lG
rou
p le
vel
2005Acquisition of BioMar
2007Acquisition of Provimi
2012JV in
Costa Rica
2014JV in
Turkey
2011Expansion
in Myre
2002Acquisition of Fibertex
2003 Green-field in
Malaysia
2011 Acquisitionin France
EUR +300minvestments
in cap.
2004 Acquisition
in Czech
2011 FPC and FIN
demerger
1988Acquisition
of Grene
~1990Internatio-nalisation
2009 Grene/Hydra
demerger
2010 Hydra in China
and India
~1995 A strong focus
on industry
2015-Growth andacquisitions
2013 Grene/Krampcombination
10 years of strong growth and profitable development
14 years of transformation and expansion
27 years of active and developing ownership
16.04.2015ABG small & midcap seminar 32
Our mantra16.04.2015ABG small & midcap seminar 33
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
Investment guidelines (for platform investment)
We have a long-term investment strategy and is open to attractive acquisitions and appropriate divestments of companies
We have no predetermined exit strategy for the investments we make
We want to keep and develop its businesses as long as we are the best owner
We have clear targets for return on capital and profit for all investments
Area Criteria
IndustryB2B, preference for process industry and logistics/distribution
SizeRevenue – now or short-term realizable – of more than DKK 1bn
GeographyDanish headquartered (but international focus)
OwnershipPreferable wholly owned, but open to value-creating structures
Leading position
Within top 5 in its niche/segment
Manage-ment
Strong and ambitious. No operational resources at Schouw & Co. HQ
Need for a new owner
We need to bring something to the business
Possible to be active
Plans for development and transformation
16.04.2015ABG small & midcap seminar 34
Two main long-term shareholders Increase in share price and trading volume
16.04.2015ABG small & midcap seminar 35
Ownership
Givesco+EE32%
Hornsylds Legat15%
Treasury shares
8%
Danish (27%) and foreign (18%)
institutional and retail investors
45%
Sole purpose is owning shares in Schouw & Co.
Administrated by the Board of Directors in Schouw & Co.
Danish active family-owned business fund with activities
within bakery, industrial equipment, food/chocolate
and hardware.
75 75 84 77 77 102 128 153
115 81 101 15476 0
0
180
0
100
200
300
400
2007 2008 2009 2010 2011 2012 2013 2014
Dividends paid (DKK million) Share buy-back (DKK million)
Strong historical yield
0
2.000
4.000
6.000
8.000
10.000
12.000
0
50
100
150
200
250
300
350
400
Jan2012
Mar2012
May2012
Jun2012
Aug2012
Oct2012
Dec2012
Feb2013
Apr2013
Jun2013
Aug2013
Oct2013
Dec2013
Feb2014
May2014
Jul2014
Sep2014
Nov2014
Jan2015
Trading/day (3M average) Share price
2012
+61%
2013
+49%
2014
+30%
Strategic highlights in the businesses
BioMarContinued growth in existing marketsImproving profitability in NorwayLimiting risk throughout the value chainSalmon is below 5% of global farmed seafoodM&A to fuel volume ambition in new marketsConstantly above 5% EBIT margin
Fibertex Personal CareContinued growth in Asian demand for nonwovensSustaining superior quality and customer relationsFocus on improving profitability and returnLevering on full ownership in printing business15% ROIC and EBIT > 12%
Fibertex NonwovensIntegration and consolidation of investmentsContinuing transition from volume to value-addGrowth – both in and outside Europe8-9% EBIT target remains realistic
Hydra-GreneAdapting to volatility in global wind supplyGrowing in new segments, e.g. offshoreMaintaining ROIC > 15%
KrampHarvesting synergies and growing the integrated biz.Investing in new markets (West+East Europe)Revenue ambition of EUR 1bn and 13% EBITDA
16.04.2015ABG small & midcap seminar 36
Capital structure
It is not a target to remain debt-free Investments in our businesses (capex and bolt-on acquisitions)
will likely be the main use of liquidity
Comfort zone for NIBD is 1-2 times EBITDA
In 2015 dividends increased by 33% to DKK 8 DKK 8 corresponds to 2.8% of market cap end of 2014
or 48% of 2014 profit for the year
Dividends have been raised annually in four successive years
Share buybacks is periodically on the agenda Gross share buyback in 2014 was DKK 180m
Total buyback in 2010-2014 amounts to DKK 410m
16.04.2015ABG small & midcap seminar 37
Schouw & Co. aims to pay stable or growing dividends, always with due consideration for the company's earnings and any potential major investments or acquisitions.
Dividend policy
BioMar
Fish farming/feed geography16.04.2015ABG small & midcap seminar 39
Atlantic salmon, trout Atlantic salmon, coho, trout, tilapia
Sea bass, sea bream, portiontrout, eel, a.o.
Shrimp, tilapia, catfish, pangasius, etc.
Market size ~2.0m tMarket growth* 5-6%Market share 20-25%
Market size ~1.4m tMarket growth* 5-6%Market share 25-30%
Market size ~0.7m tMarket growth 0-1%Market share 25-30%
Market size +10m tMarket growth 4-5%Market share -
2014 revenue DKK 4.1bn 2014 revenue DKK 2.6bn 2014 revenue DKK 1.8bn
Brande, Denmark Dueñas, Spain
Nersac, FranceVolos, Greece
Castro, Chile
Pargua, Chile
Myre, Norway
Karmøy, Norway Grangemouth, UK Guanacaste, Costa Rica
*Long-term market growth over the ‘salmon cycle’; flat/negative volume development in 2015
Pargua, Chile
NORTH SEA AMERICAS CONTINENTAL EUROPE ASIA
BioMar’s strategy16.04.2015ABG small & midcap seminar 40
Organisationally and geographically
Focus on current daily
business
Actively utilise competences
across BioMar units
New geographies and species
Grow organically in line with existing markets
Establish units (incl. production) in 2-4 new geographies before 2017, to the extent possible focusing on a limited number of species (< 5)
Strengthen global capabilities
More well defined structures and systems
ELEMENTS DIRECTION AND PRIORITIES
Ambitions from 2012 strategy plan16.04.2015ABG small & midcap seminar 41
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Volume (1000 tons)
Sales of approx. 1.7 m tons in 2017 Approx. half through organic growth The other half in new markets (acquisitions/JV’s/green fields) 5-6% EBIT margin ROIC > 15%
‘Beyond the limits’
‘Going for Profitable Global Growth’
‘Going for Global Growth’
BioMar group strategy:
0
2
4
6
8
10
196
0
196
4
196
8
197
2
197
6
198
0
198
4
198
8
199
2
199
6
20
00
20
04
20
08
20
12
20
16
20
20
20
24
20
28
20
32
20
36
20
40
20
44
20
48
Mega-trend driven demand16.04.2015ABG small & midcap seminar 42
The only sustainable way to increase the supply of fish is by fish farming.
It is not possible to increase the wild catch without environmental consequences.
Salmon is healthy
High content of vitamins and healthy fatty acids (Omega 3)
Effective growth
Low feed conversion ratio 1 kg feed gives almost 1 kg fish Fish adapts to temperature High yield (few bones and fins)
Stable supply
Multiple slaughtering periods and good forecasting systems
BioMarEWOSSkrettingMarine HarvestAustevoll/LerøyMultiple farmers
Africa
Asia
Population, billion
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0wild catch aquaculture
Source: FAO, 2013, farmed and wild salmonids
GLOBAL POPULATION GROWTH
GROWTH IN AQUACULTURE
Revenue 8,451mEBITDA 574m- margin 6.8%
EBIT 434m- margin 5.1%
ROIC 22.9%Employees 904
AQUACULTURE BENEFITS
FOCUSED FISH FEED PRODUCER
2014 FINANCIALS
Revenue ~8,500mEBIT 360-410m
2015 GUIDANCE
BioMar growth potential
Existing markets Continued growth in salmon markets
Adequate capacity in medium term
Continental market expected to remain flat
Improvements due to scale, logistics and R&D
Maintaining market shares requires capex
New markets Huge ‘world’ outside existing BioMar markets
BioMar can add superior feed performance
Strong toolbox for optimising recipes
Continuous improvements and R&D
New raw materials
Ability to process recipes
Risk controlling in volatile raw material markets
Food safety and sustainability
However; farmed fish do not starve today!
Food safety and sustainability comes at a cost
High-value/EU-US consumed species likely step 1
Farmers need to be professional enough to measure and value performance, etc.
16.04.2015ABG small & midcap seminar 43
1.0m 3.0m 5.0mfarmed salmon/trout in Norway
1.2m 3.6m 6.0mtons feed used in Norway
5,5% 2,6%implied feed CAGR
Europe 4%
LatAm 4%
Other 3%
China 57%
Other Asia 32%
Salmonids 4%
Tilapia 4%Shrimps 8%Freshwater 10%Carps 40%
Other 34%
Source: SINTEF, 2012, Verdiskapingbasert på produktive hav i 2050
2010 2030 2050
The otherbusinesses in the portfolio
Fibertex Personal Care16.04.2015ABG small & midcap seminar 45
Global top 5 producer of nonwovens for hygiene
Supplies fabrics used in baby diapers, feminine hygiene and incontinence care products
Spunbond/spunmelt technology, an integrated one-step process – from raw material to fabric
Polypropylene is the key raw material
Strong regional business
3 production lines in Denmark
4 production lines in Malaysia
Printing facilities in Germany
Growing and staying market (no alternatives)
A regional industry ∙ customers and suppliers
Simple supply chain ∙ from PP to rolls of fabric
Large investments ∙ DKK +300m for a new line
High level of competence ∙ efficiency/quality
Low margin ∙ high volume
Service and innovation makes the difference
"Preferred" partner ∙ customized activities
Core business: Spunbond for hygiene
Large customers requiring good relationship
Sensitive, small and autonomous industry
Raw materials (few suppliers, linked to oil)
One supplier of machinery (Reifenhäuser)
Customers (limited number)
Commodity products (low-margin business)
Salary and level of energy in Denmark
Radical innovations are very difficult
HIGHLIGHTS THE BUSINESS MODEL
INDUSTRY CHARACTERISTICS
Revenue 1,788mEBITDA 308m- margin 17.2%
EBIT 171m- margin 9.6%
ROIC 14.4%Employees 447
2014 FINANCIALS
Asian market continues to grow and requires significant capex
Increasing focus on value-added products (softer, bulkier, loftier and printed)
Revenue ~1,700mEBIT 160-180m
2015 GUIDANCE
Spunmelt is a regional industry16.04.2015ABG small & midcap seminar 46
EUROPEMarket size c. 450k t
Market growth c. 0-2%
FPC market share c. 10%
Customers P&G, SCA, KC,Hartmann, TZMO,Ontex, Abena, a.o.
Competitors Pegas, PGI,Fitesa, Union,
Dunour, Gulsan
ASIAMarket size c. 300k t
Market growth c. 10-12%
FPC market share c. 15%
Customers P&G, SCA, KC,Unicharm,Daio,
Henang, DSG, a.o.
Competitors Toray, PGI,Asahi, Mitsui,
Universial, AvgolAMERICASMarket size c. 400k t
Market growth NA c. 0-2%LatAM c. 10%
FPC market share 0%
Fibertex Nonwovens16.04.2015ABG small & midcap seminar 47
European top supplier of industrial nonwovens
Huge versatility in product applications
Needle punching and spunlacing technology
State-of-the-art technology on all sites
Ensure critical mass / continue profit increase
Leverage on European market leader position and increase global presence
Strong competitiveness through operational improvements and state-of-the art techonology
Continue transformation; reducing dependency on volume/commodity products and growing value-added/specialty products
Building Composites
Geotextiles Concrete
About ⅓ of revenue
Infrastructure growing in emerging markets
Value added products e.g. within composites
Geotex. is commodity
Bedding Flooring
Furniture Acoustics
Hood insulation Trunk carpets
Parcel trays Wheel housing
About ⅓ of revenue
Market leader after French 2011 acquisition
Significant pipeline
Substitutes existing fabrics and part of car construction
About ⅓ of revenue
Dependent on economic cycles
Volume products
Ongoing application extension e.g. nano
16kt capacity10kt capacity 16kt capacity
7kt capacity 4kt capacity
HIGHLIGHTS AUTO
Revenue 1,048mEBITDA 128m- margin 12.2%
EBIT 62m- margin 5.9%
ROIC 8.4%Employees 547
2014 FINANCIALS
2015 will be a year of transition where new capacity will beinstalled and existingproduction lines will beupgraded.
EBIT target is 8-9%.
Revenue ~1,200mEBIT 65-75m
2015 GUIDANCE
STRATEGIC PRIORITIESCONSTRUCTION
INDUSTRIAL
Hydra-Grene16.04.2015ABG small & midcap seminar 48
Leading Danish supplier of hydraulic components
Specialised trade and engineering business
Strong R&D resources taking active part in customer product development
Solid base in Danish aftermarket and OEM
Long-term growth and huge potential in the global wind turbine industry
Aftermarket customers (~25% of total revenue) Both premium and low-cost items at stock Predominantly distributed through dealers End customers within agro, lift/truck, transport
OEM customers (~25% of total revenue) Product know-how and customer support key Component distribution and own production Prod. of blocks, pipes and pump stations End customers are manufacturers of agricultural equipment, lift/trucks, boats, etc.
Hydra-Grene’s position Present in Europe, China, India and USA Strong within gear (filter blocks and systems) Total solutions in water cooling and pumps
Trends and drivers Turbine manufacturers wants fewer suppliers Established manufacturers setting the standards Increased documentation and quality More focus on aftermarket services
HIGHLIGHTS THE DANISH INDUSTRIAL BUSINESS
Revenue 566mEBITDA 78m- margin 13.8%
EBIT 60m- margin 10.6%
ROIC 22.6%Employees 230
2014 FINANCIALS
The offshore segment is gradually gainingimportance and willbecome a ‘thrid leg’.
Revenue >500mEBIT 45-55m
2015 GUIDANCE
SELECTED PRODUCTS AND BRANDS
THE GLOBAL WIND TURBINE INDUSTRY
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
Combination of Kramp and Grene Grene wholly owned by Schouw & Co. since 1988
20% ownership in Kramp from non-cash merger between Grene and Kramp in 2013
Schouw & Co. owns 20%, management 50% and NPM Capital (Dutch long-term PE) 30%
Integration and harvesting synergies A perfect geographical match…
Expanding product ranges
Growing OEM business (partnerships)
Margin improvement through scale
Best practice (warehouse, IT, logistics)
Optimizing working capital (stockturn)
Potential annual synergies EUR 10-30m
16.04.2015ABG small & midcap seminar 49
Nine distribution centers covers 22 European countries. Former Kramp in blue, former Grene in orange and Russian JV in turquoise
Revenue 4,906mEBITDA 529m- margin 10.8%
EBIT 405m- margin 8.3%
Employees 2,604
2014 FINANCIALS
Revenue ~5,250mEBIT 425-450m
2015 GUIDANCE
Contact
Investor Relations CEO/President
Kasper Okkels Jens Bjerg Sørensen
[email protected] schouw @ schouw.dk
+45 87 34 58 24 +45 86 11 22 22