Introduction to Schouw & Co.

Transcription

1 INVESTOR PRESENTATION 5 December 2018 Kasper Okkels, VP Business Development, Strategy & IR Danske Bank Winter Seminar Developing leading Danish businesses through long-term and active ownership Introduction to Schouw & Co.

2 INTRODUCTION Schouw & Co. at a glance HISTORY 140 years of company history 125 years in packaging 30 years as a conglomerate FINANCIALS 17.0 billion DKK revenue (2017) 1.6 billion DKK EBITDA (2017) 17.6 % ROIC ex. goodwill (2017) FOOTPRINT ~7,000 employees across the globe 25 countries with production sites 2 major long-term shareholders 2

3 INTRODUCTION Schouw & Co. value proposition 1 Diversified portfolio 2 3 Leading B2B businesses Active/long-term ownership 25 countries with production 7,000 employees 2 major long-term shareholders 4 Europe based, global outlook 5 ROIC focused 6 Financially strong 3

4 INTRODUCTION Strategic goals GROWTH PROFIT RETURN GEARING PAYOUT PORTFOLIO Considerable growth every year Benchmark level profitability ROIC > 15% (dependent on risk) Investment grade capital structure Constant or increasing dividends 5-7 big and strong businesses 4

5 INTRODUCTION 10 years of development Revenue (DKK billion) ROIC ex goodwill FTEs (yearly average) CAGR +10.4pp +6.3% % 18% % 16% 17% 14% 10% 7% 4% 18% CAGR +5.6% 4,108 3,743 3,334 3,166 3,287 2,873 2,052 2,139 2,382 6, EBIT (DKK million) NIBD/EBITDA Market Capitalisation (DKK million, end of year) CAGR +27.4% ,038 1, times CAGR +24.1% 6,812 5,313 3,188 3,511 2,000 2,375 2,173 9,131 13,939 12,

6 INTRODUCTION The strategic journey of Schouw & Co. Diversification Bigger and stronger portfolio Consolidating the conglomerate Go Strong 2020 From focused packaging business to a diversified industrial conglomerate Adding new businesses in the portfolio to create a conglomerate with scale and strength Strengthening by capex and bolt-on acquisitions and divestment of non-core activities Sustaining the growth platform and adding new businesses to the portfolio M&A activity Consolidated revenue DKKbn x65 +20

7 INTRODUCTION Ownership 28% 28% Givesco Main shareholder for more than 40 years; controlled by the Eskildsen family 51% 15% 15% 6% 6% Hornsylds Legat Trust whose sole purpose is to own shares in Schouw & Co. Treasury shares Shares owned by Schouw & Co. 51% Institutions and retail Danish and international shareholders (about 50/50 split) 7

8 Best ownership Active ownership Responsible ownership Ownership model Diversified portfolio 5-7 businesses Profitable growth Efficient use of capital Financial versatility Future-proofing Independent businesses Leading in niche/segment Revenue DKK +1bn Global outlook Growth every year Profit on par with the best Optimising working capital Make the asset sweat NIBD/EBITDA 1-2x Corporate Responsibility HR transformation From volume to value Results are created by people 8

9 INTRODUCTION Investment criteria INDUSTRY B2B with preferences for processing industry & logistics SIZE Revenue potential of minimum DKK 1bn GEOGRAPHY HQ in Denmark, but internationally focused OWNERSHIP Preferences for 100% (minimum majority share) LEADING POSITION Opportunity to set the agenda within niche segments MANAGMENT Strong and ambitious management NEW OWNER NEED Need for at new owner to support transformation ACTIVE OWNERSHIP Possibility to exercise active ownership 9

10 INTRODUCTION The portfolio Fish Feed Nonwovens Industrial solutions ~55% >40% ~20% ~30% ~25% <30% of 2018E sales of 2018E EBITDA of 2018E sales of 2018E EBITDA of 2018E sales of 2018E EBITDA 10

11 PORTFOLIO BUSINESSES BioMar: Global #3 in fish feed Volume Sales EBITDA Employees Growth +1 million tonnes DKK 10bn DKK m around 1, % CAGR Salmon EMEA Emerging The World s third largest producer of quality feed for industrial fish farming Manufactures feed for salmon, trout, sea bass, sea bream, tilapia, shrimp and 40 other species Aquaculture is the only sustainable way to increase the supply of fish 11

12 PORTFOLIO BUSINESSES BioMar: Long-term growth outlook Aquaculture: a growth industry BioMar is well positioned Salmon farming is very effective Increasing global population increases the global demand for proteins Fish, and especially salmon, is healthy due to the high content of Omega 3 Aquaculture feed conversion rate is high (2-3x better than poultry/pigs) The only sustainable way to increase the supply of fish is by fish farming as wild-catch cannot grow BioMar is global no. 3 in feed for high-value species like salmonids Farmed salmon is less than 10% of global farmed fish and BioMar s current markets are less than 30% the total addressable market for highvalue feed Expansion into new markets/species is key to the growth agenda Salmon Chicken Pig Beef Feed Conversion Rate Edible yield 2 45% 40% 70% Energy retention 3 10% 50% 13% 5% 23% 12 Notes: 1) How much feed to gain 1 kg weight. 2) The share for human consumption. 3) How much energy the animal retains until slaughtering.

13 PORTFOLIO BUSINESSES Fibertex Personal Care: Global spunbond Volume Sales EBITDA Employees Growth ~120,000 tonnes DKK ~2.1bn DKK m around 700 ~5% CAGR Spunbond Print The World s #5 manufacturer of spunbond nonwoven fabrics for hygiene applications The products are sold to global customers and used in baby diapers, femcare and incontinence products Increasing middle class and hygiene awareness increases the demand for Fibertex Personal Care s products 13

14 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 PORTFOLIO BUSINESSES FPC: Growth in Asian market Spunbond hygiene categories Volatile Asian growth Baby Femcare Incontinence FPC Malaysia sales CAGR +11% CAGR ~70% ~10% ~20% CAGR +11% Asia 34% ~10% 56% ~4% 31% ~7% Europe 20% ~1% 21% ~1% 25% ~6% RoW 46% 23% 44% Top 3 market participants in Asia and Europe Rest 58% 9% 16% 17% Rest 29% 12% 18% 42% Total Asian supply/demand Supply Demand Over/Under Supply Asia Europe 14

15 PORTFOLIO BUSINESSES Fibertex Nonwovens: Industrial applications Volume Sales EBITDA Employees Growth ~60,000 tonnes DKK ~1,575m DKK m around 1,000 ~10% CAGR Needlepunch Spunlace Fibre spinning Leading European manufacturer of nonwovens for various industrial applications Huge versatility in product application; sales to automotive industry, construction sector, furniture/bedding, advanced products and wipes Strong focus on increasing share of value-added products by New Product Development and geographical expansion with global customers 15

16 PORTFOLIO BUSINESSES HydraSpecma: Nordic hydraulic knowledge Volume Sales EBITDA Employees Growth ~5 million hoses DKK ~2.0bn DKK m around 1,200 ~30% CAGR Hydra Specma The leading hydraulic company in Scandinavia Partly solving complex hydraulic solutions for global industrial customers, partly wholesaler of hydraulic components to Scandinavian OEMs Strong hydraulic knowhow and understanding of customers needs combined with day-to-day logistics and state-of-the-art webshop 16

17 PORTFOLIO BUSINESSES Borg Automotive: Europe s largest remanufacturer Volume Sales EBITDA Employees Growth ~2 million cores DKK ~1.bn DKK m around 1,500 ~10% CAGR Production Sales Europe s leading remanufacturer to the automotive industry Remanufactures mechanical parts and mechatronics as starters, alternators, brakes, air condition compressors and steering for all types of cars Solid growth from a growing carpark, longer vehicle lifetime and a global focus on sustainability and circular economy 17

18 PORTFOLIO BUSINESSES GPV: Nordic Top3 LVHM EMS/box build Volume Sales EBITDA Employees Growth ~10 million finished goods DKK ~1.2bn DKK m around 1, % CAGR Electronics Mechanics The leading Danish EMS producer with significant presence in low-cost-countries Electronic Manufacturing Services (EMS) and advanced mechanics are supplied to global customers in regulated industries demanding high quality EMS is growing due to increased use of outsourcing and more and more B2B products using electronics due to Internet of Things, Big Data, etc. 18 Notes: 1) Growth adjusted for non-continuing businesses

19 Facts about CCS Introduction to CCS Geographical presence Top 25 European EMS provider and leading in German-speaking Europe Strong presence in the entire EMS value chain, including design capabilities Diversified customer base; top 20 customers account for 60% of sales Low-cost production setup in Europe (Slovakia) and Asia (Sri Lanka and China) Owned by Private Equity since 2011; growth by bolt-on acquisitions Europe Asia Sales (DKK million) EBITDA (DKK million) +15% +20% ~1,400 ~1,600 ~100 ~125 HQ and EMS production, 300 FTE EMS production, 1,000 FTE EMS production, 130 FTE EMS production, 170 FTE Cable harness, 230 FTE E E EMS and cable harness, 470 FTE 19

20 From leading Nordic to leading European Strong strategic complementary fit Combined an European top 10 EMS player GPV: 80% of customers have HQ in Northern Europe Sales (2018E, DKK million) EBITDA 1 (2018E, DKK million) Employees (FTE) more than double double more than double CCS: 80% of customers have HQ in DACH (Germany, Austria, Switzerland) ~1,225 ~1,600 +2, ~125 ~250 1,400 2,300 3,700 High-mix and low-medium volume EMS Focus on box-build products Large blue-chip customers Industrial focus / recurring business Trust and reliability are key values Engineering, test strategy, prototyping In-house mechanics competencies In-house cable and harness competencies In-house product development/design GPV CCS GPV CCS Pro forma Danish HQ with a global reach Growth and profitability at industry benchmark Low-cost setup on three continents, with global customer proximity Scale in all operational sites GPV Synergies mainly from scale (e.g. sourcing) and by cross selling (footprint and capabilities in box-build, mechanics and test) Expand customer offerings in product design and innovation CCS Pro forma GPV Transaction highlights CCS Enterprise Value about DKK 800m EV/EBITDA(18E) ~6.4x Pro forma Guidance on 2019 figures in combination with Schouw & Co annual report (March 2019) PPA, transaction costs, etc. will be communicated at a later stage Clearwater International acted as buy-side advisor for GPV/Schouw & Co. 20 Notes: 1) GPS s 2018 EBITDA guidance of DKK is before transaction costs, any impact from Purchase Price Allocation and other transaction related effects

21 OUTLOOK Solid strategic opportunities Growing global demand for farmed fish Hygiene awareness in Asia s growing middle class Increased use of lightweight nonwoven fabrics in e.g. cars Scale and synergies in Nordic hydraulic leadership Global green agenda and focus on circular economy Outsourcing trend and growth from IoT, Big Data, etc. 21

22 OUTLOOK Updated 2018 guidance Profit 2018 Q Q2 2018E 2017R 2016R BioMar Fibertex Personal Care Fibertex Nonwovens HydraSpecma Borg Automotive GPV * Other -30 c. -35 c Total EBITDA 1,580-1,650 1,580-1,700 1,665-1,805 1,568 1,472 PPA depreciation -85 c. -85 c Other depreciation -455 c c Total EBIT 1,040-1,110 1,035-1,155 1,110-1,250 1,091 1,038 Associates, etc. 75 c. 55 c Other financial items -75 c. -65 c Profit before tax 1,040-1,110 1,025-1,145 1,120-1,260 1,105 1,578 Revenue 2018 Q Q2 2018E 2017R 2016R 10,000 10, b 9,955 8,867 2,100 2,100 2,100 2,016 1,792 1,575 1,600 1,600 1,422 1,301 2,000 2,000 1,900 1,805 1,747 1,000 1,025 1, ,225 1,225 1,225 1, ,900 18,000 18,100 17,032 14, * Before transaction costs of DKK ~10m

23 OUTLOOK Long-term targets EBITDA EBIT (pre PPA) 7.5% 6% 17.5% 12% 15% 9% 13% 10% 18% 15% 10% 7% Industry growth 3-6% 5% 7-8% 5-7% 7% 5-7% 23

24 OUTLOOK 2018 focus areas remain intact 1 Build strength Maintain position and build competitive strength by focus on operational streamlining and margin management and on sustaining strategic development from volume to value Strict cost focus across all businesses 2 Allocate capital Allocate capital for growth and review future capacity expansion to ensure a strong platform for long-term value creation Profitability and cash generation top of the agenda 3 Innovation Invest to prepare for the future and put innovation and digitalisation on the agenda in all our businesses Securing future profit remain a key focus area 4 Develop across all businesses Drive intelligent synergies in financing, accounting, strategy, acquisition and developing our organisations and talent across all businesses Harvest value and using scale, e.g. in NWC optimisation 5 Investments Ensure financial resources for future investments in both maintaining and expanding capacity and in large and small acquisitions More prudent view on capex and M&A 24

25 Results are created by people Aktieselskabet Schouw & Co. Chr. Filtenborgs Plads Aarhus C Denmark schouw@schouw.dk Nasdaq Copenhagen ticker SCHO