Schouw & Co. first half of 2016

Transcription

1 Schouw & Co. first half of Investor presentation AUGUST

2 The best H1 in Schouw & Co. s history Schouw & Co. H Revenue DKK 6.1bn Growth 4.4% // H1: 5.9bn Organic decline from lower volume in BioMar Return on invested capital 19.1% ROIC incl. goodwill 15.6% Steady increase in ROIC in recent six years NIBD/EBITDA 0.4x Closing of Specma and GPV acquisitions in results in NIBD of DKK 582m EBIT DKK 372m Growth 23% // H1: 303m Organic growth in EBIT of 15% Cash flow from operations DKK 482m Growth 115% // H1: 224m Last-twelve-month cash flow +1.4bn Significant investment program capex BioMar adds capacity in Norway and in JVs FPC adds capacity in Malaysia and upgrades lines

3 Strong H1 report on the P/L side Schouw & Co. H Organic growth H1 to H1 Acquisitive growth Revenue (DKKm) EBIT (DKKm) Comments 5, % % 6, Revenue grows 4.4% due to acquired businesses Specma and GPV Organic revenue declines by 9% 11% lower volume in BioMar is the only driver of declining organic growth All-time-highest EBIT in first-half with EBIT margin of 6.1% (H1 5.1%) EBIT grows 15% organically and reported EBIT (including PPAs) up by 23% Very satisfactory development in all businesses, both old ones and newcomers BioMar FPC FIN H/S GPV Other BioMar FPC FIN H/S GPV Other

4 NWC reduced and solid ROIC figures Schouw & Co. H Net Working Capital (DKKm) ROIC (percentage) Comments ROIC excl. goodwill 2, % ,993 ROIC incl. goodwill % Significant reduction in NWC in BioMar, partly due to lower volume, partly due to increased use of supply chain financing Group NWC lower than despite consolidation of Specma and GPV Acquisitions of Specma and GPV increases Invested Capital ROIC excl. goodwill increases to 19.1% (H1: 17.0%) and incl. goodwill increases to 15.6% (H1: 14.1%) All businesses except FIN currently meets Schouw & Co. s 15% ROIC target 1 BioMar FPC FIN H/S GPV Other BioMar FPC FIN H/S GPV Schouw Notes: 1) GPV above 15% when adjusting for PPA

5 Strong cash flow generation Schouw & Co. H Organic growth H1 to H1 Acquisitive growth Cash Flow from Operations (DKKm) Cash Flow to Investments (DKKm) Comments % % 73 8 Very strong Cash Flow from Operations Solid increase in BioMar, mainly due to reduction in NWC Total Cash Flow to investments of DKK 888m with significant investments in all businesses and acquisitions of Specma and GPV BioMar FPC FIN H/S GPV Other BioMar FPC FIN -498 H/S 72 2 GPV Other -888

6 Schouw & Co. H NIBD remains low despite significant use of cash Net Interest-Bearing Debt (DKKbn) NIBD/EBITDA Acquisition of Specma 1 DKK 640m 2.7 Acquisition of GPV 1 DKK 400m Dividends DKK 238m 2.0 Investments H1 DKK 337m DKK +1.5bn Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q x 2017 Notes: 1) The shown Enterprise Values for Specma and GPV does not fully correspond to the recognised NIBD and cash flow effect

7 BioMar: Strong Europe but uncertain Chile Schouw & Co. H Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Strong financial development Volume decreases 11% in H1, lower salmon markets Chile volume drops +30% in Q2 as consequence of a.o. algae bloom, but market share increases H1 EBIT flat but Q2 much better than LY driven by solid progress in Europe (non-salmon and Norway) 1, % 2,230 1,837 1, Positive effect from other operating income Guidance upgrade following strong Europe Solid position in Europe but uncertainty in Chile Strong sales concepts and margin management Contract base in Norway renewed as expected Uncertain market conditions in Chile where total volumes are down but salmon prices remain high Progress in new JVs in China and Turkey Q2 EBIT (DKKm) +17.9% ROIC (excl. goodwill %) kt capacity increase in Norway by 2017

8 Schouw & Co. H Fibertex Personal Care: Solid progress in Malaysia Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Solid financial figures H1 revenue increases by 7% and H1 EBIT by 35% (mainly as Q1 was soft) Volumes in Denmark flat but Malaysia increases volumes with over 30% both in Q1 and Q2 Good product mix, high efficiency but limited negative effect from raw material escalation clauses % FY EBIT outlook raised with DKK 20m Significant investment program Investing to secure long-term profitable growth Malaysia adds 20kt capacity and invests in print Upgrading a line in Denmark to produce super soft high-loft material Printing activities contribute with solid EBIT and line #4 in Germany currently being installed Q2 EBIT (DKKm) +6.8% ROIC (excl. goodwill %)

9 Schouw & Co. H Fibertex Nonwovens: Significant progress in Q2 Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Good progress in Q2 Q2 back-on-track after a more soft Q1 Q2 revenue increases 10% and EBIT up by 17% Strong demand in auto and advanced products South Africa contributes with a significant loss and a new management team has initiated turn-around % Guidance for the full year maintained implying solid increase since High activity and longterm valuecreation Capacity increased in the Czech Republic Continued development of value-added products Turkish site upgraded to producing auto products South Africa will also supply to Europe Innovation pipeline and new product applications remain strong Q2 EBIT (DKKm) +44.6% ROIC (excl. goodwill %)

10 Schouw & Co. H Hydra/Specma: A Nordic leader in hydraulics Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Specma boosts figures High level of activity in the much larger hydraulic business following the acquisition of Specma Increase in revenue mainly due to Specma but the old Hydra 15% higher than H1 Solid activity in wind segment in Q % FY EBIT guidance upwards adjusted by DKK 10m following the strong start of the year A transformed Hydra A Nordic leader supplying many attractive segments Specma s mining and offshore segments very soft Relocation of production from Sweden to Poland as part of a long-term plan for reducing costs Sourcing synergies soon to materialise as planned Q2 EBIT (DKKm) +26.1% ROIC (excl. goodwill %) Combined Hydra/Specma has a very strong name

11 Schouw & Co. H GPV: Good start of the new business in the portfolio Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Good financials in its first quarter in Schouw GPV consolidated from beginning of Q2 Revenue at same level as in EBIT before effect from PPA of DKK 7m significant above Q2 Solid order intake and good product mix Unchanged guidance for FY Today, GPV is Denmark s biggest EMS supplier Q2 EBIT 1 (DKKm) ROIC (excl. goodwill %) Growth high on the agenda Focus on larger outsourcing cases where the new ownership means new opportunities Establishing in Mexico on the back of existing larger customer s growth and also by winning new orders Presence in three time zones supports GPV s strong market position 7 Notes: 1) Adjusted for DKK 7m in Purchase Price Allocation in Q2

12 Schouw & Co. H Kramp: Solid profit despite weak agro sector Q2 and H1 comments Q2 revenue (DKKm) NWC (% of LTM revenue) Financial figures remain very attractive Increase in revenue by 5% despite weak agro sector in most of Europe EBIT a bit lower than mainly due to change in product mix and increase in fixed costs (a.o. IT) Profit margins remain at very strong levels +5.4% 1,305 1,360 1,439 1, FY EBIT outlook lowered DKK 20m following the weak outlook for European agro sector Investments and development Investment required to maintain the strong market leader position in almost all European countries Strong partnership with leading machinery manufactures like AGCO and SDF Significant investments in digitalisation and securing a state-of-the-art IT platform Q2 EBIT (DKKm) +6.7% ROIC (excl. goodwill %) +1.1 Investment in new capacity in Distribution Centres

13 Guidance upgraded Schouw & Co. H Profit (DKKm) after Q2 after Q1 org. actual BioMar Fibertex Personal Care Fibertex Nonwovens Hydra/Specma GPV PPA effect c. 35 c H/S -25m Other GPV -7m c. -20 c. -20 c Total EBIT Associates etc Financial items, net c. -30 c. -35 c Profit before tax Kramp EBIT (100%) Revenue (DKKm) after Q2 after Q1 org. actual c. 8,500 c. 8,500 c. 9,200 8,974 c. 1,900 c. 1,900 c. 1,900 1,797 c. 1,400 c. 1,400 c. 1,400 1,222 c. 1,700 c. 1,700 c. 1, bn 14.1bn 14.2bn 12,566 c. 5,400 c. 5,400 c. 5,4 5,126 Notes: 1) Including DKK 65m from Incuba Invest s sale of Scandinavian Micro Biodevices in Q2

14 Our Business Model The Foundation Schouw & Co. H The Schouw Model 5-7 industrial businesses B2B focus and international Leading position Solid growth potential Strong management Intelligent synergies DIVERSIFIED PORTFOLIO ACTIVE AND DEVELOPING OWNERSHIP Through and with mgmt Transformation ROIC > 15% Profitable growth Effective use of capital Future-proofing Room to Manoeuvre The Platform Secure freedom to act Support growth and investments Power and speed in decisions NIBD/EBITDA comfort zone 1-2x Freedom to think longterm FINANCIAL VERSATILITY OPENNESS Listed on the stock exchange Clear business models required Credible communication Long-term value creation Ensure fair market value

15 Our modus operandi is active ownership Schouw & Co. H PROFITABLE GROWTH EFFICIENT USE OF CAPITAL FUTURE- PROOFING