Schouw & Co. Full Year 2017

Transcription

1 Schouw & Co. Full Year 2017 Investor presentation MARCH 2018 CEO JENS BJERG SØRENSEN IR KASPER OKKELS

2 2017 Annual Report 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 The portfolio 2017 Annual Report 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

4 2017 financial highlights 2017 Annual Report Revenue Profit Cash Flow Return +18.5% +10.1% % +6.5% % +6.7% pp -2.6pp Organic revenue Total revenue EBITDA EBIT CF Op. before NWC CF from Operations ROIC excluding GW ROIC including GW

5 2017 operational highlights 2017 Annual Report Acquisitions Capex Competition Innovation Borg Automotive became 6 th portfolio leg in April 2017 EV 100% DKK ~1.1bn BioMar builds world s biggest fish feed site in Karmøy Capex DKK ~350m BioMar faces price pressure especially in Norway, offset by increasing market share BioMar introduces Omega3 rich feed based on sustainable algae products Alimentsa gives strategic foothold in shrimp for BioMar EV 70% DKK ~800m FPC establishes new site in Malaysia and adds 20kt capacity Capex DKK ~400m FPC sees period of over capacity in Europe, hence focus on NPI and innovation FPC patents a super-soft and cloth-like material called Fibertex Loft BHE part of Nordic EMS consolidation in GPV EV 100% DKK ~40m GPV announces multi-year extension of its Thailand site Capex DKK +200m FX and raw material prices remain volatile and affect competitiveness FIN develops filtration solutions based on nano technology In 2018, FIN acquires Brazilian peer to grow with auto customers EV 100% DKK ~80m

6 2017 Annual Report Across all businesses: growth but less cash generation Revenue (DKK billion) EBITDA (DKK million) Cash Flow Operations (DKK billion) 18.5% , % ,568 1,598-52% ,369 1,087 1, BioMarFPC FIN HySp Borg GPV Other BioMarFPC FIN HySp Borg GPV Other BioMarFPC FIN HySp Borg GPV Other 2017

7 Cash Flow generation 2017 Annual Report Operational Cash Flow (DKK million) Underlying Cash Flow from Operations increases, but significant negative impact from NWC Net Working Capital (DKK million) NWC increase follows higher activity. Significant less attractive to use Supply Chain Financing in BioMar. 1, CF Op before NWC +6.6% EBITDA Net financials 1,309 Tax Other 2017 CF Op before NWC 546 Cash part of NWC change Acquisitions Incl. acq. BioMar HySp CF impact , FPC 63 FIN Borg GPV Non-cash NWC NWC 2017 CF FX etc. from Operations , % Other ,505 2, %

8 NIBD development 2017 Annual Report Net Interest-Bearing Debt (DKK million) Selected investments 1 NIBD increases mainly from acquisitions, high capex and low cash flow generation in H1 1, ,275 BioMar expansion in Karmøy, Norway DKK ~350m Fibertex Personal Care in Sendayan, Malaysia DKK ~400m Fibertex Nonwovens expansions and line upgrades DKK ~125m 1,115 GPV in Guadalajara, Mexico and new SMT capacity DKK ~50m -1,028 NIBD 31 Dec 2016 Acquisitions Dividends Investments CF operations 2017H1 CF operations 2017H2 Other NIBD 31 Dec 2017 Notes: 1) Some of the investments lies outside 2017

9 10 years of development 2017 Annual Report Revenue (DKK bn) ROIC ex goodwill FTEs (yearly average) CAGR +6.3% % 4% 10% 14% +10.4pp 20% 18% 15% 16% 17% 18% 3,743 3,334 3,166 CAGR +5.6% 3,287 2,873 2,052 2,139 2,382 6,087 4, EBIT (DKK m) NIBD/EBITDA Market Capitalisation (end of year) CAGR +27.4% ,038 1, times ,188 2,000 2,375 2, % 3,511 5,313 6,812 9,131 13,939 12,

10 Delivering on our strategic goals 2017 Annual Report GROWTH PROFIT RETURN GEARING DIVIDENDS PORTFOLIO Considerable growth every year Benchmark level profitability ROIC > 15% (dependent on risk) Investment grade capital structure Constant or increasing dividends 5-7 strong businesses Revenue growth EBIT benchmark ROIC NIBD/EBITDA Dividends DKK/share Portfolio % 5,6% 3,8% 14,8% 6,2% 12,4% 4,6% 13 16,1% 13 0, % 6.6% 14.4% Bio- Mar Peer 4,9% 4,7% FPC Peer 15,2% 2,0% 14 FIN Peer 15 7,1% 6,1% 16 16,9% 18,3% 20,2% 14 0, ,4-0, % HySp Peer Borg Peer GPV Peer 17 17,6% 17 0,

11 2017 Annual Report BioMar: Strong salmon but tough competition EBIT EBITDA Revenue DKKm Profit DKKm ROIC % Excl. GW Incl. GW 8,702 8,451 CAGR +3.4% 8,974 8,867 9, CAGR +9.1% pp 35.8% 30.1% 22.9% 22.7% 24.4% 20.1% 19.5% 14.7% 16.6% 16.4% Financials Significant volume growth of 20% All divisions contribute to growth, but especially salmon region increases Very strong Q4 better than expected EBIT at 2016 level which was significantly affected by one-off income ROIC declines but remains very attractive NWC negatively affected by changed use of Supply Chain Financing Segments Increase in market share in salmon Price competition in Norway remains tough no change since 2017 Q3 Very strong profitability in EMEA Ecuador significant contributor to EBIT Salmones Austral (23% non-core ownership) in significant progress (2017 EBITDA DKK 380m, NIBD DKK 500m) Non-consolidated 50% JVs (China/Turkey) revenue DKK ~700m, EBIT DKK ~40m 2018 outlook Volume growth driven by new capacity and full-year effect from Ecuador Increased market share in Norway will offset price pressure Innovation and NPI to drive future growth Growth in non-consolidated JVs 2018 sales expected at DKK bn 2018 EBITDA increase to DKK m

12 FPC: Growth in Asia and pressure in Europe EBIT EBITDA Revenue DKKm Profit DKKm ROIC % 1,554 CAGR +6.7% 1,787 1,797 1,792 2, CAGR +11.2% Annual Report pp Excl. GW Incl. GW 20.7% 19.2% 18.4% 17.1% 14.4% 15.8% 14.9% 13.6% 12.8% 13.5% Financials Strong Q4 with sales 20% above 2016Q growth driven by volume increase in Malaysia and expansion of print business Attractive ROIC despite huge investments Segments Strong sales of new volume in Malaysia Asian demand continues to grow doubledigit Demand for print continues to grow both in Europe, Asia and Americas Value-added focus to compensate for price pressure in Europe 2018 outlook Focus on value-added products (softness, light material, print) Revenue expected to reach DKK 2.1bn EBITDA expected at DKK m with uncertainty from raw material prices and FX (especially USD/MYR)

13 FIN: Continuing profitable growth 2017 Annual Report EBIT EBITDA Revenue DKKm Profit DKKm ROIC % Excl. GW Incl. GW 933 CAGR +11.1% 1,222 1,301 1,048 1, CAGR +23.9% % 4.7% +2.7pp 8.4% 7.5% 7.8% 7.0% 7.7% 7.0% 7.8% 7.1% Financials Continued progress in sales and EBIT, both Q/Q and Y/Y 9% increase in both 2017 sales and EBIT Negative result in South Africa offsetting solid progress in European business ROIC is lower than 15% target due to underperformance in South Africa and relatively large tied-up capital Segments Good performance on all European sites Strong sales to automotive and other highvalue segments Higher activity in US with strong EBIT improvement and good pipeline Continued challenging market in South Africa (EBIT DKK -13m) Foothold in Brazil following recent acquisition 2018 outlook Strong market position from investments in capacity expansion, value add and innovation Stable market activity expected Focus on new products and innovation Small positive effect from Brazil acquisition Revenue expected to reach DKK 1.6bn and EBITDA at DKK m

14 EBIT EBITDA Revenue DKKm Profit DKKm ROIC % 480 CAGR +39.3% ,747 1, CAGR +17.6% Annual Report HydraSpecma: Utilising the combined platform 22.6% 22.6% 18.2% 18.2% -5.2pp 28.9% 28.9% Excl. GW Incl. GW 16.1% 13.6% 13.0% 11.1% Financials Q4 sales above expectations but EBIT deviated negatively Profit adversely affected by lower demand in wind sector, restructuring in China and high costs following high Swedish activity ROIC declines as NWC increases from strategic decision on higher inventory Level of synergies from integration of Hydra and Specma continues as planned Segments Strong market position after Specma acquisition in 2016 with solid platform of serving international customers Demand for more capacity requires investments in Nordic and Poland Unchanged pressure from global customers of lower costs China the weak spot in 2017 loss making 2018 outlook Continued integration and further utilisation of the combined platform Solid position to long-term growth Positive outlook in truck/bus and wind, but marine remains challenging Revenue expected to reach DKK 1.9bn EBITDA expected at DKK m

15 2017 Annual Report Borg Automotive: Solid start in the new business EBIT EBITDA Revenue DKKm Adj. profit DKKm ROIC % CAGR +3.9% 2017 adjusted for PPA and a special one-off cost relating to the acquisition CAGR +13.9% Excl. GW Incl. GW % 12.7% Financials Borg Automotive acquired in April 2017 at EV/EBITDA17 of 7.4x Overall, the first 9 months in Schouw & Co. were as expected Adjusted for PPA and a special one-off cost relating to the acquisition EBIT increased 14% compared to 2016 Solid ROIC in first year of acquisition Segments Increase in both IAM (independent aftermarket) and OE sale Optimising production footprint, UK/PL Growth strategy targeting new products Review of need for new production capacity 2018 outlook Consolidation in the automotive aftermarket changes industry dynamics Borg s broad product range opens many doors and gives Borg a strong position Revenue expected to increase to DKK +1bn EBITDA expected at DKK m

16 GPV: Significant growth in sales and profit 2017 Annual Report EBIT EBITDA Revenue DKKm Profit DKKm ROIC % CAGR +15.9% Excl. GW +1.2pp Incl. GW ,148 CAGR +23.7% % 17.1% 15.9% 16.5% Financials A very strong year for GPV Revenue growth of 31% with similar increase in profit Best-in-class EBIT margin performance Synergies from BHE acquisition materialises as expected Strong execution of high order intake Mexico still in ramp-up phase (lossmaking) Solid ROIC performance above target Segments Effect from long-term customer relations Solid demand in many segments and very strong order intake throughout 2017 Mexico commercially operational in 2017 but volume still being built up Major extension of Thailand sites planned Added capacity in Denmark 2018 outlook Sales growth from increased outsourcing and customer s focus on a.o. IIoT Positive outlook in Americas Pressure on component delivery times Revenue expected to reach DKK ~1,225m and EBITDA to increase to DKK m

17 Schouw & Co focus areas 2017 Annual Report Build strength Allocate capital Maintain position and build competitive strength by focus on operational streamlining and margin management and on sustaining strategic development from volume to value Allocate capital for growth and review future capacity expansion to ensure a strong platform for long-term value creation 3 Innovation Invest to prepare for the future and put innovation and digitalisation on the agenda in all our businesses 4 5 Develop across all businesses Investments Drive intelligent synergies in financing, accounting, strategy, acquisition and developing our organisations and talent across all businesses Ensure financial resources for future investments in both maintaining and expanding capacity and in large and small acquisitions

18 Outlook 2018: Solid increase 2017 Annual Report Profit 2018E 2017R 2016R BioMar Fibertex Personal Care Fibertex Nonwovens HydraSpecma Borg Automotive GPV Other c Total EBITDA 1,665-1,805 1,568 1,472 PPA depreciation c Other depreciation c Total EBIT 1,110-1,250 1,093 1,038 Associates, etc. c Other financial items c Profit before tax 1,120-1,260 1,105 1,578 Revenue 2018E 2017R 2016R b 9,955 8,867 c. 2,100 2,016 1,792 c. 1,600 1,422 1,301 c. 1,900 1,805 1,747 c. 1, c. 1,225 1, c. 18.1b 17,032 14,369 Portfolio business guidance changed to EBITDA level but full disclosure on depreciations and PPA Increase in both revenue and profit guidance across all businesses FX incorporated at current levels largest exposure to USD (BioMar Chile, BioMar Ecuador, FPC Malaysia, FIN USA), GPB (BioMar, Borg), NOK and SEK Total 2018 capex DKK ~750m with a few major items: BioMar Australia DKK ~300m FPC print US DKK ~80m GPV Thailand DKK ~150m

19 Confirming the long-term goals 2017 Annual Report 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%

20 Summing up 2017 Annual Report Schouw & Co. level Best revenue/ebit performance ever in Schouw & Co. Well-proved business model Delivering on strategic goals Financial versatile despite significant investments Well-balanced portfolio with active growth agenda Business level All businesses contributing to the solid performance Taking markets shares in competitive markets Well-positioned for further expansion with attractive growth rates in all industries Strong focus on margin management, value-add and global production footprint Capitalising on capex and M&A