Interim report First quarter of 2013

Transcription

1 Company announcement No. 7/2013, May 2, pages Interim report First quarter of 2013 Highlights The Q1 performance was in line with expectations, with revenue of DKK 2,578 million (: DKK 2,695 million) and EBIT of DKK 57 million (: DKK 137 million). BioMar reported lower EBIT due to a fall in volumes sold in a contracting overall market. Fibertex Personal Care has had a good start to the year, supported by the increased capacity in Malaysia. The other businesses experienced negative impacts from challenging market conditions and cold weather conditions in Europe. Profit from discontinued operations (Martin Professional) of DKK 270 million after tax. The profit for the period after tax was DKK 368 million (: DKK 78 million). We maintain our full-year guidance for Accordingly, Schouw & Co. expects to generate full-year 2013 revenue of about DKK 13.5 billion and EBIT in the DKK million range. Jens Bjerg Sørensen, President of Schouw & Co., said: The start to 2013 was as difficult for Schouw & Co. as we had anticipated. The first quarter was a period of challenging markets and cold weather conditions in most of Europe, and all of our businesses experienced an expected decline with the exception of Fibertex Personal Care. However, it is important to note that the market and the weather conditions of the first quarter of provided a much more positive setting for our businesses, and that our results for the first quarter of were exceptionally good. The performance of the first quarter of 2013 confirms the full-year expectations we announced at the release of our annual report for. We expect consolidated revenue growth compared to, but mainly due to higher raw materials prices. Our EBIT will not quite be in line with last year's figure, but our earnings will remain quite attractive. We expect to generate a substantial cash flow and to reduce our debt in That will provide us with new opportunities while supporting our long-term plans to invest in growing and developing our businesses. Schouw & Co. will be reviewing the financial statements in a conference call (in Danish) for analysts, members of the press and other interested parties on telephone , THURSDAY, MAY 2, 2013 AT Questions relating to the above should be directed to Jens Bjerg Sørensen, President, on tel Aktieselskabet Schouw & Co. Chr. Filtenborgs Plads 1 DK-8000 Aarhus C CVR no.: Tel schouw@schouw.dk Contents Financial highlights... 2 Interim report... 3 Management statement... 7 Business areas... 8 Income statement Cash flow statement Balance sheet Statement of changes in equity Notes to the financial statements... 23

2 Consolidated financial highlights Amounts in DKK million January 1 March 31 GROUP SUMMARY YTD 2013 YTD TOTAL Revenue 2, , ,477.8 Operating profit before depriciation (EBITDA) ,162.6 EBIT before goodwill impairment Operating profit (EBIT) Profit/(loss) after tax in associates (1.2) (1.3) (4.7) Value adjustment of financial investments ¹ 73.5 (12.0) (68.3) Net financials before value adjustment of financial investments (15.2) (22.2) (85.9) Profit before tax Tax on profit (16.3) (26.6) (144.5) Profit for the period from continuing operations Profit for the period from discontinued operations Profit for the period Share of equity attributable to shareholders of Schouw & Co. 5, , ,623.9 Minority interests Total equity 5, , ,627.3 Total assets 9, , ,381.3 Net interest-bearing debt (NIBD) 1, , ,023.0 Working capital 2, , ,892.1 Other key and financial data Average number of employees 2,931 2,843 2,873 Cash flows from operating activities (146.8) Investments in property, plant and equipment Depreciation of property, plant and equipment Return on equity (%) ² 17.0 (2.8) 11.3 ROIC (%) ² Equity ratio (%) EBITDA margin (%) EBIT margin (%) NIBD/EBITDA ² Per share data Earnings per share (of DKK 10) Net asset value per share (of DKK 10) Share price at end of period (of DKK 10) Price/net asset value Market capitalisation ³ 4, , ,510.7 The financial ratios have been calculated in accordance with Recommendations & ratios 2010, issued by the Danish Society of Financial Analysts. Martin has been divested and has therefore been reclassified from a consolidated business to discontinued operations. Comparative figures for in the income statement and the financial highlights and key figures have been restated accordingly, whereas comparative figures for balance sheet items are not restated. 2) Calculated over the latest 12 months. 1) Value adjustment consists of value adjustments and dividends from the holdings of shares in Vestas and Lerøy. 3) Market capitalisation is calculated excluding the holding of treasury shares. 2

3 Interim report First quarter of 2013 Financial performance YTD 2013 YTD Change Revenue 2, ,695.4 (117.4) EBITDA (76.9) EBIT (80.3) Value adj. financial inv (12.0) 85.5 Profit before tax Profit from discon. opert Profit for the period Overall, the companies of the Schouw & Co. Group had a muted start to 2013, as the long-lasting winter and low temperatures in northern Europe had a pronounced impact on several of our businesses. The decline becomes even more pronounced when compared with the extremely good start to. Back then, a number of factors were unusually favourable compared with prior years, and there were more working days in the first quarter of last year than in The consolidated revenue was down by 4% from DKK 2,695 million in Q1 to DKK 2,578 million in Q with lower revenue reported by all companies apart from Fibertex Personal Care, which reported a significant improvement, and the pro rata consolidated joint venture Xergi. EBIT was down by DKK 80 million from DKK 137 million in Q1 to DKK 57 million in Q Similar to the revenue performance, all businesses but Fibertex Personal Care and Xergi reported EBIT setbacks. The Q profit before tax was affected by a positive value adjustment on financial investments of DKK 74 million, as compared with a negative value adjustment of DKK 12 million in Q1. Due to the lower average interestbearing debt, the Group s other financial items improved from an expense of DKK 22 million in Q1 to an expense of DKK 15 million in Q Accordingly, our consolidated profit before tax for Q was DKK 114 million, compared with a DKK 102 million profit in Q1. On December 19,, Schouw & Co. agreed to divest Martin Professional to Harman International Industries of the United States. Accordingly, Martin has been reclassified to discontinued operations in both the and 2013 consolidated financial statements. The transaction was finalised effective February 28, 2013 and the gain from the sale is recognised in the first quarter of Profit from discontinued operations, which is stated after tax, amounted to DKK 270 million in Q The amount consists of the profit from Martin until the end of February plus the preliminary gain from the sale of Martin less costs and other adjustments related to the transaction, including, in particular, write-downs of DKK 22 million on two properties in Frederikshavn which Schouw & Co. took over from Martin prior to the transaction. Profit from discontinued operations in Q1 was DKK 3 million, the amount relating entirely to Martin. Accordingly, our consolidated profit after tax for Q was DKK 368 million, compared with a DKK 78 million profit in Q1. Liquidity and capital resources All companies of the Schouw & Co. Group have made it a priority in recent years to reduce their working capital and net interest-bearing debt. We reduced the debt further in the first quarter of 2013 by divesting Martin and by selling a non-strategic shareholding in Lerøy Seafood Group. Operating activities produced a cash outflow of DKK 147 million in Q1 2013, compared with a cash inflow of DKK 6 million in Q1. In Q1, we had a cash outflow from investing activities of DKK 67 million, whereas in Q we had a cash inflow of DKK 76 million from a sale of securities. Discontinued operations generated a cash inflow of DKK 512 million in Q1 2013, compared with DKK 8 million in the year-earlier period. The consolidated net interest-bearing debt was reduced from DKK 2,023 million at December 31,, to DKK 1,531 million at March 31, Net interest-bearing debt including Martin was DKK 2,801 million at March 31, The Group s working capital was reduced from DKK 2,321 million at March 31,, at which time the amount included Martin, to DKK 2,054 million at March 31, Calculation of the working capital is affected by the implementation of amendments to IAS 16 which, as explained under the section 'Accounting policies', mean that certain spare parts are reclassified from inventories to production plant and machinery. The change has reduced the working capital by DKK 55 million. This is a translation of Schouw & Co. s Interim Report for the three months ended March 31, The original Danish text shall be controlling for all purposes, and in case of discrepancy, the Danish wording shall be applicable. 3

4 Portfolio company highlights The Schouw & Co. businesses generally had a muted start to The following is a brief review of individual company performances in the first quarter of 2013: BioMar realised a volume decline in the North Sea region resulting from a contraction of the overall market that was partly due to the unusually cold weather conditions. The operations in Chile also suffered reduced volumes due to a smaller overall market. On the other hand, Continental Europe reported improvements, especially in the southeastern parts of the region where weather conditions were more favourable compared to last year. In addition, the operations in Costa Rica were not yet in operation in the first quarter of. Both revenue and earnings for Q were in line with expectations, but the assumption factors used for the fullyear forecast have not developed favourably, quite the contrary. Fibertex Personal Care has had a really good start to the year, lifting its revenue through an increase in activity at the plant in Malaysia, where production capacity was increased following the launch of a new production line in the autumn of 2011, and good sales from the plant in Denmark. In the spring of, Fibertex Personal Care announced plans for a further extension of the facility in Malaysia, which will increase capacity by about 30% in The project is now underway, and the new production line is expected to be run in by the end of the year. Fibertex Nonwovens reported slightly lower revenue and earnings than for the same period of last year. The decline was caused by lower activity in Europe, as a number of markets still have not recovered following the downturn occurring in the second half of. In the past year, Fibertex Nonwovens has strengthened its potential to become Europe's leading manufacturer of industrial nonwovens. A number of structural investments have been made and the business platform has been strengthened. The company has reduced its overall cost base and improved its competitive strength. Grene incurred a revenue decline, mainly due to the longlasting winter, and an earnings decline due to lower revenue and higher costs due in part to the implementation of a new ERP system in Denmark. Grene continued the work to strengthen its core operations. As part of these efforts, Grene entered into an agreement to merge its Finnish activities with peer company Noramaa Oy. The joint venture, in which Grene will have a 56% stake, will be a relatively more important player on the Finnish market. In Denmark, Grene has divested the activities of Grene Industri-service in a move to further focus its business. Hydra-Grene has had a slow start to the year, suffering a revenue decline ascribable in particular to the expected significant decline in sales to the wind turbine industry relative to the very high level of sales in the same period of. Hydra-Grene is still involved in several large development projects for the wind turbine industry that are expected to be positive contributors to revenue in the longer term. However, a very large proportion of these projects are not expected to be ready for actual serial production until in As for the other OEM industry customers, Hydra-Grene expects the distribution agreement concluded with Sauer- Danfoss at the end of to be a positive contributor to business activities. 4

5 Financial investments Schouw & Co. continues to hold 4,000,000 shares in Vestas, equal to a 1.96% ownership interest. At March 31, 2013, the shares were priced at DKK per share, compared with DKK per share at December 31,, producing an unrealised capital gain of DKK 59 million for Q At December 31,, Schouw & Co. also held 1,000,000 shares in Lerøy Seafood Group. This shareholding was divested in January Proceeds from the transaction amounted to DKK 145 million, producing a realised capital gain on the shareholding of DKK 15 million for Q Combined, financial investments produced financial income of DKK 74 million in Q1 2013, as compared with a financial expense of DKK 12 million in Q1. Schouw & Co. shares and shares held in treasury Schouw & Co. s share capital comprises 25,500,000 shares with a nominal value of DKK 10 each for a total nominal share capital of DKK 255,000,000. Each share carries one vote. Schouw & Co. shares appreciated by 34% during the first quarter of 2013, from DKK per share at December 31, to DKK per share at March 31, At December 31,, the company held 1,938,363 treasury shares, equal to 7.60% of the share capital. In the first quarter of 2013, Schouw & Co. used 211,250 treasury shares in connection with options exercised under the Group s share incentive scheme, and after the end of the quarter, the company has used a further 70,000 shares for the same purpose. As a result, the company currently holds 1,657,113 treasury shares, corresponding to 6.50% of the share capital. The portfolio of treasury shares is recognised at DKK 0. Effective from May 1, 2013, the rules for disclosing senior employee transactions in the company's shares have been amended to the effect that the duty of disclosure no longer rests with the company, but rather with the individual senior employee. As a result, the company will no longer report trading in Schouw & Co. shares by insiders through company announcements. Instead, such trading activities will be reported directly to the Danish Financial Supervisory Authority. Subsequent events Other than as set out elsewhere in this interim report, Schouw & Co. is not aware of events occurring after March 31, 2013, which are expected to have a material impact on the Group's financial position or outlook. Outlook Overall, the companies of the Schouw & Co. Group produced results for the first quarter of 2013 that were in line with expectations, but which were also well below the exceptionally good performance of the first quarter of. When we announced our full-year forecasts on March 6, 2013, the weather conditions of the first two months of the year were known factors, but we had not foreseen that the severe winter weather conditions with low temperatures in northern Europe would drag on for so long. Some but certainly not all of the revenue lost during the cold months can be recovered in the coming months. The cold weather has had a big impact on the financial performance of BioMar and Grene in particular and a smaller impact on Fibertex Nonwovens, resulting in greater challenges for the rest of the year. However, all three companies expect to report EBIT within their announced guidance ranges. Hydra-Grene has also had a weak start to the year due to reduced sales to the wind turbine industry. Hydra-Grene had anticipated the drop in sales and therefore expects to report EBIT within the announced guidance range, but the full-year results will depend strongly on whether the increase in business activity expected in the next few months will materialise. Fibertex Personal Care, on the other hand, has had a very good start to the year, and that increases the probability of the company achieving the expected earnings improvement relative to. Overall, Schouw & Co. continues to expect consolidated revenue in the vicinity of DKK 13.5 billion in The revenue may change quite substantially due to changes in raw materials prices, without necessarily having any effect on profit. The full-year EBIT forecast is maintained at the range of DKK million. Forecast EBIT (DKK million) After Q1 Orginal BioMar Fibertex Personal Care Fibertex Nonwovens Grene Hydra-Grene Others (0-10) (0-10) -10 Total EBIT Associates (5) (5) (5) Financial invetments - - (68) Other financials* (80) (80) (86) Profit before tax* * Guidance before the effects of financial investments. 5

6 Accounting policies The interim report is presented in accordance with IAS 34 Interim financial reporting as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies. Other than as set out below, the accounting policies are unchanged from those applied in the Annual Report. Effective from January 1, 2013, Schouw & Co. has implemented Amendments to IAS 1, Amendments to IFRS 7, IAS 19 (amended 2011) and Annual improvements to IFRSs Annual Improvements to IFRSs contain Amendment to IAS 16, which changes the accounting treatment of spare parts to the effect that certain parts previously classified as inventories are classified as production plant and machinery with effect as from January 1, The implementation had no other effect on recognition and measurement. IFRS 13 changes the principles for calculating fair values of both financial and non-financial assets and liabilities, while also introducing a number of new disclosure requirements. As Schouw & Co. already applies the principles for calculating fair value, the standard will only have an effect on disclosure requirements applying to Schouw & Co. See Annual Report for a full description of the accounting policies. Judgments and estimates The preparation of interim reports requires Management to make accounting judgments and estimates that affect the application of accounting policies and recognised assets, liabilities, income and expenses. Actual results may differ from these judgments. The most significant estimates are unchanged from December 31,, and the most significant judgment uncertainty related thereto is the same as that used in preparing the Annual Report. Roundings and presentation The amounts appearing in this interim report have generally been rounded to one decimal place using standard rounding principles. Accordingly, some additions may not add up. Financial calendar for 2013 August 15, 2013 November 7, 2013 Release of the H interim report Release of the Q interim report The company will provide detailed information about contacts and times for webcasts and conference calls held in connection with the announcement of its interim reports on its website, and through stock exchange announcements. 6

7 Management statement The Board of Directors and the Executive Management of Aktieselskabet Schouw & Co. today considered and approved the interim report for the period January 1 March 31, The interim report, which has been neither audited nor reviewed by the company s auditors, was prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and Danish disclosure requirements for interim reports of listed companies. In our opinion, the interim report gives a true and fair view of the Group s assets and liabilities and financial position at March 31, 2013 and of the results of the Group s operations and cash flows for the period January 1 March 31, Furthermore, in our opinion the Management s report includes a fair review of the development and performance of the business, the results for the period and of the Group s financial position in general and describes the principal risks and uncertainties that it faces. Aarhus, May 2, 2013 EXECUTIVE MANAGEMENT Jens Bjerg Sørensen President Peter Kjær BOARD OF DIRECTORS Jørn Ankær Thomsen Erling Eskildsen Niels K. Agner Erling Lindahl Chairman Deputy Chairman Kjeld Johannesen Jørgen Wisborg Agnete Raaschou-Nielsen 7

8 BioMar Wholly owned BioMar is the world s third-largest manufacturer of quality feed for the fish farming industry. The company divides its operations into three geographical regions: the North Sea (Norway and Scotland), the Americas (Chile and Costa Rica) and Continental Europe. Financial performance Fully in line with expectations, BioMar incurred a year-onyear decline in revenue in the first quarter of 2013, reporting revenue of DKK 1,520 million, as compared with DKK 1,615 million in Q1. Volumes sold fell by a relatively larger margin, as higher prices of raw materials led to higher selling prices. A large part of the volume decline was the result of a considerable contraction of the overall market of the North Sea region that was in part caused by unusually cold weather conditions in early 2013, whereas temperatures were unusually high in the beginning of. On the other hand, BioMar as well as the overall market have improved compared to the first quarter of 2011 when water temperatures were also relatively low. In Chile, both BioMar's volumes sold and the overall market declined, whereas Continental Europe reported improvements, especially in the south-eastern parts of the region, where weather conditions were more favourable this year than last year. The volume improvements in Costa Rica, where production had not yet begun in the first quarter of, account for almost 3% of total volumes. The gross margin per kilo increased slightly, but the severe reduction in volumes slashed EBIT from a profit of DKK 52 million in Q1 to a loss of DKK 5 million in Q The decline related almost entirely to the North Sea region and Chile. As expected, Costa Rica had a slightly positive overall effect. BioMar's working capital grew from DKK 764 million at March 31, to DKK 976 million at March 31, The increase related especially to Chile and trade receivables there. BioMar's Chilean customers are in a financial situation that represents a challenge in terms of collecting trade receivables. Continental Europe increased its working capital to some extent, and the value of inventories rose due to higher prices of raw materials. Despite payment of intra-group dividends of DKK 200 million and increased working capital, net interest-bearing debt increased by only DKK 4 million to stand at DKK 809 million at March 31, Business development As expected, there has been a shift in the market for salmon feed. Instead of recent years' very high growth rates in Chile and Norway, current prospects now indicate a fall in both Chile and the North Sea region in Although there is a time lag between the salmon market and the feed market, the much tighter supply/demand balance has pushed up salmon prices considerably. That situation will strengthen the already healthy balance 8 sheets of Norwegian fish farmers and will naturally also be very positive for their Chilean peers. However, the situation is much different in Chile, as fish farmers there suffered major losses in following the financial difficulties originating from the period of diseased fish stocks in The situation in Chile is still considered to be extremely challenging, and a possible deterioration of the biological situation would also have a negative effect. Nevertheless, BioMar's forward-looking view of Chile as a very attractive market has not changed. There were no material changes to the situation for Continental Europe. The very constrained economic situation in southern Europe makes risk management difficult, and business opportunities are constantly weighed against potential risks. Although generally upward trending, the prices of the fish species produced by BioMar's customers remain at moderate levels, not least considering the fact that rising raw materials prices trigger higher feed prices. There is a consolidation trend among BioMar's customers, in part necessitated by economic challenges demanding structural changes, in part driven by a desire for growth and positioning. Generally, the positive aspects of this trend are believed to outnumber the negative ones. Given the prospects of a stagnant feed market, there is no need in the short term for investing in major capacity expansion, but BioMar is still planning a comprehensive optimisation and maintenance investment programme. Operations in Costa Rica are largely developing to plan, and production output is moving closer to full capacity. Focus is now on further developing the business. For BioMar, R&D is essential for success, and the company is now following up on recent years expansion of its R&D staff by investing in a research facility that will make developing feed even faster and more efficient in future. Outlook Both revenue and earnings for Q were as expected, but the assumption factors used for the full-year forecast have not developed favourably, quite the contrary. Nevertheless, BioMar maintains its guidance for FY 2013 revenue of about DKK 9 billion and EBIT in the DKK million range. As always, the profit guidance is subject to a number of factors, and any forecast this early in the year will inherently be subject to uncertainty, not least considering the fact that the first quarter is clearly BioMar's low season. YTD 2013 YTD total DKK million Volume (1000 t) Revenue 1,520 1,615 8,227 - of which North Sea ,879 - of which Americas ,483 - of which Continental Europe ,865 Direct production costs (1,211) (1,272) (6,447) Gross profit ,780

9 BioMar Amounts in DKK million January 1 March 31 YTD 2013 YTD total INCOME STATEMENT Revenue 1, , ,226.5 Gross profit ,133.9 EBITDA Depreciation Operating profit (EBIT) (4.8) Value adjustment of shares in Lerøy Financial items, net (ex. adj. of Lerøy) (8.5) (12.8) (38.0) Profit before tax Tax on profit 5.2 (8.1) (93.7) Profit for the period CASH FLOW Cash flows from operating activities (161.9) (85.6) Cash flows from investing activities (16.3) (124.5) Cash flows from financing activities (277.2) BALANCE SHEET Intangible assets * Property, plant and equipment 1, , ,088.3 Other non-current assets Cash and cash equivalents Other current as s ets 2, , ,891.5 Total assets 4, , ,686.1 Equity 1, , ,777.0 Interest-bearing debt 1, , Other creditors 1, , ,017.5 Total liabilities and equity 4, , ,686.1 Average number of employees FINANCIAL KEY FIGURES EBITDA margin 2.1% 5.5% 7.2% EBIT margin -0.3% 3.2% 5.3% ROIC (annualised) 19.4% 24.6% 22.8% Working capital Net interest-bearing debt * Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK million. 9

10 Fibertex Personal Care Fibertex Personal Care is among the world's five largest manufacturers of spunbond/spunmelt nonwovens for the personal care industry, used mainly for nappies, sanitary towels and incontinence products. The company's activities are concentrated mainly in Europe and South East Asia. Financial performance Fibertex Personal Care lifted revenue by 16% from DKK 355 million in Q1 to DKK 411 million in Q The positive revenue performance was mainly the result of an increase in activity at the plant in Malaysia, where production capacity increased with the launch of a new production line in the autumn of 2011, and good sales from the plant in Denmark. Q EBIT was DKK 47 million as compared with DKK 37 million in Q1. The earnings improvement is a logical effect of the increased activity in Malaysia and the increase in sales from the plant in Denmark. Fibertex Personal Care reduced its working capital from DKK 256 million at March 31, to DKK 251 million at March 31, The reduction is a result of an accounting reclassification of certain spare parts from inventories to production plant and machinery in accordance with IAS 16, this effect having more than offset the natural increase in working capital that follows from the revenue improvement. The company's net interest-bearing debt fell marginally from DKK 619 million at March 31, to DKK 617 million at March 31, In an assessment of the net interestbearing debt, it is important to note that Fibertex Personal Care distributed intra-group dividends of DKK 75 million in the first quarter of Business development Fibertex Personal Care has production facilities in Denmark and Malaysia and is well-renowned in both Europe and Asia for its service, quality and innovation. It is extremely important to the company's customers that they have very reliable supplies as well as sufficient flexibility in their sourcing of nonwovens, allowing them to respond to volume fluctuations in the market. The market is generally very demanding in terms of products and product performance, and product quality is a huge priority. Wholly owned In the spring of, Fibertex Personal Care announced plans for a further extension of the facility in Malaysia, which will increase plant capacity by about 30% in The project is now underway and construction of the buildings has begun. The new production line is expected to be run in by the end of the year. The most recent extension of the existing plant at Nilai close to Kuala Lumpur included preparations for this upcoming extension, which is expected to help Fibertex Personal Care share in the expected growth of the Asian markets. The central location in Malaysia gives the facility a solid platform for making competitive shipments to all of south-east Asia. Increasing the share of speciality products is a constant priority for Fibertex Personal Care, including supersoft products, products with high performance leakage barriers, light-weight products as well as the print products that Fibertex can deliver through its partly-owned business Innowo Print in Germany. Outlook The global output capacity of nonwoven fabrics is constantly growing, leading to excess capacity in different regions from time to time. Fibertex Personal Care sees Europe as a market with limited growth potential and resulting strong price pressure. Asia is a growing market in which price competition is also a factor, but where growing demand absorbs the surging supply in the region. In 2013, the operational focus of Fibertex Personal Care will be on maintaining earnings by optimising production line operations, maintaining its high operational efficiency and ensuring high-capacity utilisation. The market focus will be on growing sales in order to accommodate the greater capacity and on passing on increases in raw materials prices by constantly aligning selling prices. Fibertex Personal Care continues to expect to generate revenue of about DKK 1.6 billion in 2013, but as always the revenue may be strongly affected by changes in prices of raw materials. The FY EBIT forecast is also unchanged and expected to be in the DKK million range. YTD 2013 YTD total DKK million Revenue ,459 - of which from Denmark of which from Malaysia

11 Fibertex Personal Care Amounts in DKK million January 1 March 31 YTD 2013 YTD total INCOME STATEMENT Revenue ,459.2 Gross profit EBITDA Depreciation Operating profit (EBIT) Financial items, net (1.6) (5.1) (15.3) Profit before tax Tax on profit (10.7) (12.2) (31.2) Profit for the period CASH FLOW Cash flows from operating activities Cash flows from investing activities (25.4) (7.6) (109.9) Cash flows from financing activities (33.2) (34.4) (115.6) BALANCE SHEET Intangible assets * Property, plant and equipment Other non-current assets Cash and cash equivalents Other current as s ets Total assets 1, , ,567.3 Equity Interest-bearing debt Other creditors Total liabilities and equity 1, , ,567.3 Average number of employees FINANCIAL KEY FIGURES EBITDA margin 19.1% 18.8% 19.0% EBIT margin 11.5% 10.3% 10.7% ROIC (annualised) 14.1% 14.4% 13.4% Working capital Net interest-bearing debt * Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK 48.1 million. 11

12 Fibertex Nonwovens Fibertex Nonwovens is among Europe's leading manufacturers of nonwovens, i.e. non-woven textiles used for a number of different industrial purposes. Financial performance Fibertex Nonwovens generated revenue of DKK 232 million in Q1 2013, compared with DKK 249 million in Q1. The revenue decline was caused by lower activity in Europe, as a number of markets still have not recovered following the downturn occurring in the second half of. Q EBIT was DKK 10 million as compared with DKK 13 million in Q1. The earnings performance is the result of reduced demand from customer segments that have been exposed to the economic slump in Europe and the higher prices of raw materials. Fibertex Nonwovens reduced its working capital from DKK 306 million at March 31, to DKK 282 million at March 31, The reduction is first and foremost the result of an accounting reclassification of certain spare parts from inventories to production plant and machinery in accordance with IAS 16. The net interest-bearing debt fell by DKK 28 million from DKK 515 million at March 31, to DKK 487 million at March 31, Business development The Q earnings performance was impacted by the general economic slump in Europe, relatively unfavourable weather conditions throughout Europe having a negative effect on construction activity, and higher raw materials prices. These effects have been partly offset by higher earnings on big volume contracts and increased sales of high-value products, as well as a generally good output capacity considering market conditions. In the past year, Fibertex Nonwovens has strengthened its potential to become Europe's leading manufacturer of industrial nonwovens. A number of structural investments have been made and the business platform has been strengthened. The company has reduced its overall cost base and improved its competitive strength. Wholly owned Fibertex Nonwovens' market approach has been to adapt to the competition and to maintain the good momentum from when the company strengthened its position in the European markets while also increasing growth outside Europe. At the same time, earnings on its high-volume business were optimised through product development and operational improvements, combined with increased sales of customised value-added products. The company is maintaining its sales strategy and the dedicated efforts to expand sales in order to achieve high capacity utilisation and future earnings. In terms of development and innovation, the company has built a solid portfolio of new projects, consisting of a number of products for the auto industry and products that will be sold in new geographical markets, for which shipments gradually began in and will be stepped up in As regards raw materials, the first quarter was a period of high prices. Fibertex Nonwovens is working to gradually align selling prices with developments in the prices of raw materials and the general competitive situation in combination with a good capacity utilisation and high production efficiency. Outlook Fibertex Nonwowens expects 2013 to be a year of economic downturn and challenging market conditions, like, but the company will continue to capitalise on the efficiency-improving measures implemented and on an increase in sales of the new products launched in recent years. The market focus in 2013 will be on increasing sales and on aligning selling prices with any increases in raw materials prices. The company also expects to grow its sales of value added and customised products and to increase exports to non-european markets. The operational focus will be to enhance earnings by optimising production line operations, maintaining high operational efficiency and ensuring high-capacity utilisation. Against this background, Fibertex Nonwovens continues to expect a moderate revenue improvement in 2013 to about DKK 950 million and EBIT in the range of DKK million. YTD 2013 YTD total DKK million Revenue of which from Denmark of which from Czech Rep of which from France

13 Fibertex Nonwovens Amounts in DKK million January 1 March 31 YTD 2013 YTD total INCOME STATEMENT Revenue Gross profit EBITDA Depreciation Operating profit (EBIT) Profit from associates (1.5) (1.2) (6.5) Financial items, net (3.1) (3.8) (18.7) Profit before tax Tax on profit (2.1) (2.6) (2.7) Profit for the period CASH FLOW Cash flows from operating activities (3.6) (6.1) 79.7 Cash flows from investing activities (6.6) (5.2) (59.3) Cash flows from financing activities (46.5) BALANCE SHEET Intangible assets * Property, plant and equipment Other non-current assets Cash and cash equivalents Other current as s ets Total assets 1, , Equity Interest-bearing debt Other creditors Total liabilities and equity 1, , Average number of employees FINANCIAL KEY FIGURES EBITDA margin 11.5% 11.7% 10.3% EBIT margin 4.3% 5.1% 3.1% ROIC (annualised) 3.5% 1.3% 3.8% Working capital Net interest-bearing debt * Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK 32.0 million. 13

14 Grene Grene is a leading supplier of spare parts and accessories for the agricultural sector in the Nordic region, Poland and Russia, and a supplier of technical articles and other goods for industry. Financial performance Grene generated revenue of DKK 298 million in Q1 2013, compared with DKK 329 million in Q1. A large part of the revenue decline was due to the long-lasting winter, which has delayed the usual spring preparations in the agricultural sector. EBIT fell from DKK 17 million in Q1 to DKK 3 million in Q In addition to the inherent effect of the revenue decline, earnings were also constrained by the implementation of a new ERP system in Grene Danmark. The overall working capital increased slightly from DKK 424 million at March 31, to DKK 429 million at March 31, The company's net interest-bearing debt increased by a similar amount from DKK 473 million at March 31, to DKK 479 million at March 31, Business development In the agricultural industry, the prolonged period with frost and snow and the late spring season has had a very negative impact on Q revenue and earnings. Grene expects to make up for some of the lost revenue in the second quarter, when the delayed spring preparations get underway, but a part of the lost revenue will not be recovered. Grene's Danish operations implemented the new ERP system that the company has already implemented in Sweden and Norway. The process was successful, and surprisingly it did not cause any substantial drain on the organisation's resources. Grene expects to implement the ERP system in Poland at the end of the year. In Finland, Grene entered into an agreement to merge its relatively modest activities in that market with peer company Noramaa OY. The joint venture, in which Grene will have a 56% stake, will be named Grene Noramaa Oy and is expected to have total revenue of about DKK 75 million. The merger is expected to be in place by the end of the second quarter of In the Industry segment, Grene has divested the activities of Grene Industri-service in order to focus more on Grene's Wholly owned core activities. Ownership of the activities has been transferred to the new owner on April 30, 2013, but Grene will maintain the business relations by continuing to supply a number of products to the activities divested. Due to the transaction, Grene will incur a slight drop in its overall revenue, but the change is not expected to have any significant effect on the financial results for Following the transaction, Grene's Industry segment in Denmark will consist of Grene Industri and Grene Wind Industry Supply, both of which are units under Grene Danmark. In other national markets, Grene serves its industry customers through local Grene companies. Outlook The European market is currently undergoing change, with international players in the agricultural industry consolidating their operations and new partnerships being formed. The changes being made are making the international markets even more competitive but Grene is well positioned to meeting the market challenges. The full-year guidance announced when the annual report was released on March 6, 2013 fully reflected the more competitive situation in the agricultural industry and the generally subdued activity in the industry segment, as well as the increased resources allocated to system and market development. The actual Q results would indicate a greater decline than the guidance provided, but as Grene believes that a part of the revenue not generated in the first quarter has been postponed to the second quarter, the company expects to achieve full-year financial results within the announced guidance range. As a result, Grene maintains its full-year 2013 forecast of revenue of nearly DKK 1.4 billion and EBIT in the DKK million range. YTD 2013 YTD total DKK million Revenue ,353 - of whichdenmark of which Poland of which Sweden of which Norway of which Finland other markets

15 Grene Amounts in DKK million January 1 March 31 YTD 2013 YTD total INCOME STATEMENT Revenue ,353.0 Gross profit EBITDA Depreciation Impairment Operating profit (EBIT) Financial items, net (3.0) 1.2 (12.7) Profit before tax (0.2) Tax on profit (0.6) (4.5) (18.0) Profit for the period (0.8) CASH FLOW Cash flows from operating activities (28.6) (5.8) 93.3 Cash flows from investing activities (12.4) (22.4) (72.0) Cash flows from financing activities (18.9) BALANCE SHEET Intangible assets Property, plant and equipment Other non-current assets Cash and cash equivalents Other current as s ets Total assets 1, , ,004.0 Equity Interest-bearing debt Other creditors Total liabilities and equity 1, , ,004.0 Average number of employees FINANCIAL KEY FIGURES EBITDA margin 3.9% 7.6% 9.6% EBIT margin 0.9% 5.3% 6.9% ROIC (annualised) 10.8% 12.7% 12.8% Working capital Net interest-bearing debt

16 Hydra-Grene Hydra-Grene is a specialised trading and engineering company whose core business is trading and producing hydraulic components and systems development for industry as well as providing related consulting services. Financial performance Hydra-Grene generated revenue of DKK 112 million in Q1 2013, compared with DKK 153 million in Q1. The decline was due especially to an expected sharp drop in sales to the wind turbine industry relative to Q1, which was a period of a very high level of activity. Sales to the rest of the OEM industry and to the aftermarket were slightly lower than in the same period of. Q EBIT was DKK 8 million as compared with DKK 24 million in Q1. The lower earnings were a direct result of the revenue improvement. The overall working capital was reduced from DKK 221 million at March 31, to DKK 175 million at March 31, 2013, due to a lower level of activity and reduced inventories. Net interest-bearing debt fell by DKK 18 million from DKK 177 million at March 31, to DKK 159 million at March 31, 2013 following an intra-group dividend of DKK 50 million in the first quarter of Business development As had been expected, Hydra-Grene got off to a slow start to 2013 because of weak activity in the wind turbine segment relative to the year-earlier period. Sales to the rest of the OEM industry and to the aftermarket were slightly lower than in the first quarter of, especially because of reduced sales to the shipbuilding and maintenance industry. Hydra-Grene is still involved in several large development projects for the wind turbine industry that are expected to be positive contributors to revenue in the longer term. However, a very large proportion of these projects are not expected to be ready for actual serial production until in In China, the wind turbine segment is generally experiencing subdued activity. Still, there was a year-on-year increase in sales to the wind turbine industry in China in the first quarter of 2013, but that was due to one particular order that is not expected to recur. Wholly owned Sales to the wind turbine industry in India have developed favourably, but Hydra-Grene still has only moderate sales to India, mainly directed at local Indian manufacturers. As expected, sales to the US market fell compared to the first quarter of last year because of the reduced order inflow in the wind turbine segment during the prolonged period the market had to wait before it was known whether the Production Tax Credit ( PTC ) for renewable energy was going to be extended. The PTC has now been extended, and this is a very important factor in wind turbine sales to the US market. As a result, sales are expected to pick up over the coming months. Outlook Hydra-Grene expects substantial fluctuations in sales to the wind turbine industry during More specifically, sales to the wind turbine industry are expected to pick up considerably from the middle of the second quarter and to level out at the end of the year. The company also expects a growing level of activity for other OEM industry customers over the next few months following relatively muted sales during the early part of the year. In addition, Hydra-Grene expects the distribution agreement concluded with Sauer-Danfoss at the end of to be a positive contributor to business activities. Lastly, the company expects after-market sales to pick up and e-trading to become an increasingly important revenue driver. Sales to the wind turbine industry as well as to other industry customers are marked by fierce price competition which, combined with the strongly fluctuating demand during the year, makes it difficult to optimise costs. In addition, Hydra-Grene will be implementing a new ERP system in the second half of While the process will lead to optimised business procedures and processes, it will clearly be a temporary strain on the company's resources. The poor start to 2013 had been reflected in the full-year forecast, but it also serves to emphasise that the full-year results will depend strongly on whether the increase in business activity expected in the next few months will materialise. Based on this assumption, Hydra-Grene continues to forecast FY 2013 revenue of up to DKK 500 million. The full-year EBIT forecast is also unchanged and expected to be in the DKK million range. 16

17 Hydra-Grene Amounts in DKK million January 1 March 31 YTD 2013 YTD total INCOME STATEMENT Revenue Gross profit EBITDA Depreciation Operating profit (EBIT) Profit from associates Financial items, net 0.0 (1.7) (4.7) Profit before tax Tax on profit (1.9) (5.4) (15.8) Profit for the period CASH FLOW Cash flows from operating activities Cash flows from investing activities (1.7) (7.5) (21.8) Cash flows from financing activities (15.0) 0.7 (44.8) BALANCE SHEET Intangible assets Property, plant and equipment Other non-current assets Cash and cash equivalents Other current as s ets Total assets Equity Interest-bearing debt Other creditors Total liabilities and equity Average number of employees FINANCIAL KEY FIGURES EBITDA margin 9.7% 17.1% 15.2% EBIT margin 6.7% 15.3% 12.7% ROIC (annualised) 17.1% 26.0% 21.3% Working capital Net interest-bearing debt

18 Income and comprehensive income statement Amounts in DKK million January 1 March 31 Note YTD 2013 YTD TOTAL 1 Revenue 2, , ,477.8 Cost of sales (2,192.8) (2,225.1) (10,271.4) Gross profit ,206.4 Other operating income Distribution costs (220.8) (232.0) (1,006.5) 2 Administrative expenses (109.1) (104.2) (442.6) Goodwill impairment (2.7) Other operation expenses (0.7) (0.3) (0.8) Operating profit (EBIT) Profit from associates (1.2) (1.3) (4.7) Financial income Financial expenses (24.4) (54.8) (244.8) Profit before tax Tax on profit (16.3) (26.6) (144.5) Profit for the period from continuing operations Profit for the period from discontinued operations Profit for the period Attributable to: Shareholders of Schouw & Co Minority interests (0.1) Profit for the period Earnings per share (DKK) Diluted earnings per share (DKK) Earnings per share from continuing operations (DKK) Diluted earnings per share from continuing operations (DKK) Comprehensive income Items that can be reclassified to the profit and loss statement: Exchange rate adjustment of foreign subsidiaries etc. (9.9) (7.3) 36.8 Value adjustment of hedging instruments recognised during the period 2.4 (0.2) (31.3) Value adjustment of hedging instruments transferred to cost of sales 2.0 (5.5) (5.4) Value adjustment of hedging instruments transferred to financials Other comprehensive income from associates (0.5) Tax on other comprehensive income (1.6) Other comprehensive income after tax (4.9) (10.2) 18.5 Profit for the period Total recognised comprehensive income Attributable to: Shareholders of Schouw & Co Minority interests (0.2) Total recognised comprehensive income