schouw & co. presentation · schouw & co. at a glance introduction to schouw & co. nov....
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Introduktion til Schouw & Co.Dansk Aktionærforening28 November 2017VP BUSINESS DEVELOPMENT, STRATEGY & IR KASPER OKKELS
Schouw & Co. at a glanceNov. 2017Introduction to Schouw & Co. 2
HISTORY
FINANCIALS
FOOTPRINT
139years of
company historyyears in
packaging
125years as a
conglomerate
29
14.4billion DKK
revenue (2016)million DKK EBIT (2016)
1,038% ROIC
ex. goodwill (2016)
20.2
~6,500employees across
the globe countries with
production sites
25major long-term
shareholders
2
Our value propositionNov. 2017Introduction to Schouw & Co. 3
1
2
3
4
6
5
Diversified portfolio
Leading B2B businesses
Europe based, global outlook
ROIC focused
Financially strong
Active/long-term ownershipWe build a portfolio of
leading Danish industrial businesses and develop them
through value-creating, active and long-term
ownership
MISSION
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
Strategic goalsNov. 2017Introduction to Schouw & Co. 4
10 years of developmentNov. 2017Introduction to Schouw & Co. 5
13
8.2
07 08 111009 12 14
11.6
15 16
9.88.4
9.5
11.9 12.5 11.812.6
14.4+6.5%
10%
07 1109
15%
1008 12
17%
13 14 15 16
11%
8%6%
14%16%
18%20%
+9.4pp
439
124190
369
646772
685 708831
14121107 08 09 10 13 15 16
1,038+10.0%
110807 14
3,188
09 10 1312 15 16
5,094
2,000 2,375 2,1733,511
5,3136,812
9,131
12,489+10.5%
1407 08 09 1610 11 1312 15
-0.4
0.0
3.54.0 3.9
2.62.9
1.7
0.0
-0.7
-4.2 times
131107 08 09 1210 14 15 16
3,2873,541
3,7433,334 3,166
4,108
2,873
2,1392,0522,382
+1.7%
ROIC ex goodwillRevenue (DKK bn) FTEs
NIBD/EBITDAEBIT (DKK m) Market Cap (DKK m)
OwnershipNov. 2017Introduction to Schouw & Co. 6
GivescoMain shareholder for more than 40 years; controlled by the Eskildsenfamily
Hornsylds LegatTrust whose sole purpose is to own shares in Schouw & Co.
Treasury sharesShares owned by Schouw & Co.
Institutions and retailDanish and international shareholders (about 50/50 split)
28%
15%
7%50%
The strategic journey of Schouw & Co.Nov. 2017Introduction to Schouw & Co. 7
Bigger and stronger portfolio
Consolidating the conglomerate
Go StrongDiversification
1998 2001 2006 2016
From focused packaging business to a diversified industrial conglomerate
Adding new businesses in the portfolio to create a conglome-
rate with scale and strength
Strengthening by capex and bolt-on acquisitions and di-
vestment of non-core activities
Sustaining the growth platform and adding new businesses to the portfolio
2.2 7.4 14.4+20
2020
Consolidated revenue DKKbn
M&A activity
x65
0.3
Active ownership: the transformation of FibertexNov. 2017Introduction to Schouw & Co. 8
Fibertex, then partly owned by EAC, was seeking a long-term owner willing to invest in growth
Schouw & Co. acquired the shares in the combined Fibertex business at DKK 350m
Green-field expansion in Malaysia for hygiene products
Acquisition and construction of a new factory in the Czech Republic
Fibertex de-merged into two
Investment plan ‘capturing the future’ Relocation of 200 jobs M&A in France, US, Turkey, S. Africa Turned around from loss to profit State-of-the-art equipment at all sites Leading position in most segments
Continued expansion in Asia 5 lines in Malaysia – 8 lines in total Technological upgrade in Denmark Total investments DKK ~2bn Strict focus on innovation Print business in Germany, Asia and US
2001 2002-2009 2010 2011-
Revenue
DKK 600m Total revenue (2017)
DKK ~3.4bnCAGR 11%
Diversified portfolio
INDUSTRYB2B with preferences for pro-cessing industry & logistics
SIZEMinimum revenue, or potential of, DKK 1bn
GEOGRAPHYHQ in Denmark, but internationally focused
OWNERSHIPPreferences for 100% (minimum majority share)
LEADING POSITIONOpportunity to set the agenda within niche segments
MANAGMENTStrong and ambitious management
NEW OWNER NEEDNeed for at new owner to support transformation
ACTIVE OWNERSHIPPossibility to exercise active ownership
Investment criteria
R E S U L T S A R E C R E A T E D B Y P E O P L E
In the portfolio since 2006
In the portfolio since 2001
In the portfolio since 2001
In the portfolio since 1988/2016
In the portfolio since 2016
Nov. 2017Introduction to Schouw & Co. 10
In the portfolio since 2017
~sales ~profits ~sales ~profits ~sales ~profits ~sales ~profits ~sales ~profits ~sales ~profits
BioMar: World’s 3rd largest fish quality feed producerNov. 2017Introduction to Schouw & Co. 11
~1 milliontonnes
DKK ~9.8bn
DKK 530-550m
around 900
1.9% CAGR2012-2016
Volume Sales EBIT Employees Growth
▪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
Salmon
EMEA
Emerging
Fibertex Personal Care: Global spunbond manufacturerNov. 2017Introduction to Schouw & Co. 12
~110,000tonnes
DKK ~2.0bn
DKK 250-270m
around 600
5.3% CAGR2012-2016
Volume Sales EBIT Employees Growth
▪The World’s #5 manufacturer of spunbondnonwoven 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 awarenessincreases the demand for Fibertex Personal Care’s products
Spunbond
Fibertex Nonwovens: Leading in industrial nonwovensNov. 2017Introduction to Schouw & Co. 13
~55,000tonnes
DKK ~1.4bn
DKK 80-100m
around 1,100
9.6% CAGR2012-2016
Volume Sales EBIT Employees Growth
▪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
Needlepunch
Spunlace
Fibre spinning
HydraSpecma: Leading Nordic hydraulic businessNov. 2017Introduction to Schouw & Co. 14
~4.5 millionhoses
DKK ~1.8bn
DKK 100-120m
around 1,100
34.9% CAGR2012-2016
Volume Sales EBIT Employees Growth
▪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
Hydra
Specma
Borg: Europe’s largest auto remanufacturerNov. 2017Introduction to Schouw & Co. 15
~2 millioncores
DKK ~1.0bn
DKK 150-160m
around 1,400
~11% CAGR2012-2016
Volume Sales1 EBIT1 Employees Growth
▪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
Production
Sales
Notes: 1) 2017 full-year comparable figures
The remanufacturing processNov. 2017Introduction to Schouw & Co. 16
The remanufacturing processNov. 2017Introduction to Schouw & Co. 17
GPV: International electronics and mechanicsNov. 2017Introduction to Schouw & Co. 18
~10 millionfinished goods
DKK ~1.0bn
DKK 60-70m
around 1,100
5.1% CAGR1
2012-2016
Volume Sales EBIT Employees Growth
▪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.
Electronics
Mechanics
Notes: 1) Growth adjusted for non-continuing businesses
Fish feed Hygiene spunbond
Industrial nonwovens
Hydraulics EMSAuto rema-nufacturing
Strong position in global growth industriesNov. 2017Introduction to Schouw & Co. 19
Source: Schouw & Co. estimates from various sources
2024
2015 2020
~4%
2.0
2015 2020
2.5~5%
2.3
2015 2020
3.3~8%
53
71
20202015
~6%
2015
350
2020
450
~6%
Global GDP growth (2015-20)
~3.5%
Volume (m tonnes) Value (USD bn)Volume (m tonnes)Volume (m tonnes) Value (USD bn)
32
44
20202015
~7%
Value (USD bn)
Strategic opportunitiesNov. 2017Introduction to Schouw & Co. 20
Growing global demand for farmed fish
Scale from inte-gration of recently acquired Specma
Global green agenda and focus on
circular economy
Consolidation and leverage on scale and investments
Value-creating growth and trans-formation in EMS
Hygiene awarenessin Asia’s growing
middle class
Contact
Investor Relations CEO/President
Kasper Okkels Jens Bjerg Sørensen
+45 86 11 22 22
BioMar: Strong position and growth outlookNov. 2017Introduction to Schouw & Co. 22
VA
LUE
PR
OP
OSI
TIO
NM
AR
KET
OV
ERV
IEW
20
16
FIN
AN
CIA
L D
EVEL
OP
MEN
TC
OM
PET
ITIV
E EN
VIR
ON
MEN
T2
12 1513 14 16
996980 980 955 966
-0.4%
14
8.98.7
12 13 15
8.2
16
8.59.0
+1.9%
438
12 13 14 15 16
394434 447
581+7.3%
Volume (kton) Revenue (DKKbn) EBIT (DKKm)
Fish farmersFeed manufacturesRaw materials
Salmon• Skretting• EWOS/Cargill• Marine Harvest
EMEA• Skretting• Aller Aqua
Emerging• Cargill, Skretting (global)• Tongwei, CP (Asia)
Marine Protein/Oil• Nordsildmel (meal/oil)• Aker BioMarine (krill)
Protein commodities• Cargill (veg. protein)• Caramuru (veg. protein)• ED&F (veg. oils)
Additives• DSM (pigment, vitamins)• Lallemand (probiotics)
Salmon• Marine Harvest (global)• Lerøy, Salmar, NRS,
Grieg (Norway)• Scottish Seafarm (UK)• Aqua Chile, Multiexport,
Camanchaca (Chile)
Other species• Dias, Selonda (Greece)• Many local
Salmonids
Bass, bream, portion trout
Norway
Scotland
Chile
EastMed
WestMed
Baltic
Costa RicaChina
North Sea20-25%
Chile25-30%
~30%
<1%
~1.6 mton
~0.4 mton
~1.4 mton
~0.7 mton
~10 mton
Size1 (2016)Specie Market M.share
Tilapia, shrimp
Notes: 1) Total addressable market. 2) Non-exhaustive list of selected market participants
~75% of revenue
~25% ofrevenue
<5% of revenue
Revenue
CAGR ‘10-’15 ~7%
CAGR ’16-’17~0%
CAGR ’18-20+~2%
CAGR ’16-’20~3%
CAGR ’16-’20~4-5%
Growth
Aquaculture is a growth industry
• 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 well positioned
• 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 high-value feed
• BioMar aims to grow volume by 50% by 2021 with EBIT of 6% and ROIC > 15%
• Expansion into new markets/species is key to the growth agenda
BioMar: Huge ‘world’ outside salmonNov. 2017Introduction to Schouw & Co. 23
AQ
UA
CU
LTU
RE
FEED
MA
RKE
T FO
REC
AST
STR
ATEG
IC H
EAD
LIN
ES
KEY
SUC
CES
S FA
CTO
RS
SALM
ON
FA
RM
INIS
VER
Y EF
FEC
TIV
E
14
4.24.2
10
0.7
3.2
3.1
2.6
11 12
0.8
13
7.8
3.7
4.5
15 1916 17 18
1.0
5.4
4.1
5.8
20
6.4
+8.2%
+4.1%
Other
Tilapia
Shrimp
Seabass/bream
Salmonids
All high-value species are growing, however at a lower pace
Courage
Innovation
Execution
Openness
Respect
Innovation
Cooperation
Sustainability
Performance
BioMar continuously strives to improve its ability to innovate
BioMar is determined to embrace long-term commitments towards and with stakeholders
BioMar is devoted to developing sustainable aquaculture
BioMar is committed to enabling the aquaculture industry to be a long-term profitable provider of safe, healthy seafood
Values Guiding principles “Let’s innovatate aquaculture”
Salmon
Chicken
Pig
Beef
2
3
1.2
5-7
Feed Con-version Rate1
Edibleyield2
Energyretention3
CO2footprint4
45%
50%
70%
40%
23%
10%
13%
5%
12
7
12
27
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. 4) Full lifecycle carbon footprint (incl. processing), Source: ewg.org
‘Must haves’ Differentiators
• Feed with superior growth performance, while maintaining quality of the end product, is the main differentiator
• Feed suppliers can further differentiate themselves through improved price to quality ratio, technical follow-up and ongoing innovativeness in improved feed capabilities
Technical quality of the pellet
Reliability
Logistics
Sustainability
Growth performance
Price to quality
Technical follow-up
Innovativeness
Fibertex Personal Care: Strong growth in AsiaNov. 2017Introduction to Schouw & Co. 24
HIG
H C
UST
OM
ER C
ON
CEN
TRAT
ION
1SI
GN
IFIC
AN
T G
RO
WTH
IN N
ON
WO
VEN
S
ASI
A IS
TH
E FA
STES
T G
RO
WIN
G R
EGIO
N1
VA
LUE
CH
AIN
PA
RTI
CIP
AN
TS2
17%
42%16%
18%
9%
12%
Rest58%
Asia
Rest29%
Europe
Top 3 market participants in Asia and Europe
Notes: 1) Source: Euromonitor 2016, 2) Select market participants only
1.6
3.8
1.3
2.5
3.4
2010 2015
2.0
4.6 5.8
2.4
2020
6.3
9.0
12.1+7.4%
+6.1%
Spunbond (hygiene) Spunbond (non-hygiene) Other technologies
Global growth in nonwovens consumption
Hygiene spunbond growth2010-2015 4.0%2015-2020 4.7%
Main growth drivers• Growing population• Aging population• Increasing income• Technology development
Asia
20%Europe
RoW 46%
34%
Baby Femcare Incontinence
~70%~10%
~70%~20%
~10%
~1%
56%
21%
23%
25%
31%
44%
~4%
~1%
~7%
~6%
CAGR 2015-20
Spunbond hygiene categories
Consumer Goods Manufactures
Hygeine spunbondMachinery and Raw materials
Global• Avintiv (Berry Plastics)• Fitesa• Avgol
Europe• Pegas (Czech Rep.)• Union (Italy)
Asia• Toray (Japan)• Ashai (Japan)
Machinery• Reifenhäuser• Celli Nonwovens
Polypropylene• Borealis • Braskem• Exxon • Sabic• Tasnee• Total
Global• Procter & Gamble
(Pampers, Always)• SCA (Libero, Libresse)• Kimberly Clark
(Huggies, Kotex)
Regional• Ontex (Europe)• Abena (Europe)• Unicharm (Asia)• Kao (Asia)
Fibertex Nonwovens: Solid progress and tractionNov. 2017Introduction to Schouw & Co. 25
NEE
DLE
PU
NC
HTE
CH
NO
LOG
Y1A
UTO
MO
TIV
E SE
GM
ENT
BU
SIN
ESS
SEG
MEN
TSTU
RN
AR
OU
ND
PLA
N O
NG
OIN
G
Roll goods
Laminates/composites
Sheets
Needlepunchproducts
50-2,000 g/m2
▪ Motor insulation
▪ Headliners
▪ Seating
▪ Wheel and underbody
Automotive
▪ Technical & cosmetic wipes
▪ Washing gloves
Wipes
▪ Bedding
▪ Furniture
▪ Flooring
Industrial
▪ Geotextiles
▪ Roofing
▪ Specialities
Construction
▪ Medico
▪ Filtration
▪ Composites
Advancedproducts
79
2012 2020
1023.2% 2004
20152011
2014
2015
1011 151412 17*13 16
Revenue
10 13 1511 12 1614 17*
EBIT
Transformation by extending geographical footprint
* 2017Q2 LTM figures
Global automotive industry growth drivers2
• Lighter cars to reduce fuel consumption and lower emissions
• Reduction of noise and increase • Platform modularisation• Higher safety requirements
FIN’s auto segment
Industry focus areas
• Largest segment, ~30% of revenue• 2012-2015 CAGR ~10%• Margins above average• Big customers like HP Pelzer,
Faurecia, Autoneum, Grupo Antolin
Notes: 1) Fibertex Nonwovens also uses spunlacing technology where fibres are bonded together by water under high pressure. 2) Source: IHS Database
HydraSpecma: Combining two hydraulic businessesNov. 2017Introduction to Schouw & Co. 26
HYD
RA
-GR
ENE
PR
IOR
TO
AC
QU
ISIT
ION
CU
STO
MER
SEG
MEN
TS
AC
QU
ISIT
ION
OF
SPEC
MA
PR
OD
UC
TS
▪ Highly complementing customer segments
▪ Broad geographical presence
▪ Obtaining exposure to many international industrial segments
▪ Strong platform for future growth
▪ Economies of scale
▪ Synergies primarily within sourcing and cross-selling opportunities
Strong in Denmark and in wind
▪ Small but highly profitable
▪ Revenue of DKK ~550m and +10% EBIT
▪ Two segments; Danish OEM and global wind turbine manufacturers
Wind industry growing
▪ Sub-supplier margins under pressure
▪ Low visibility in wind turbine industry
▪ Wind industry volatile and project based
Strategic ambition to grow
▪ Wish to reduce high exposure to wind
▪ Broadening geographical presense
▪ Ambition of reaching DKK 1bn in revenue
M&A required
Specma acquired early 2016 Strategic rationale
▪ A leading Nordic hydraulics and fluid conveyance application provider with strong geographical presence
▪ Revenue of DKK +1.0bn, i.e. significantly bigger than the ‘old’ Hydra-Grene
▪ Unique match between products, competences and knowhow
▪ Acquired at 8.2x EBITDA before synergies
Sweden
FinlandDenmark
Materialhandling
WindVehicles
Other
No
rd
ic
OE
Ms
Glo
ba
l a
cc
ou
nts
+
~40%of sales
~60%of sales
Totalsales of
DKK ~1.8bn
Borg: European autoreman set to growNov. 2017Introduction to Schouw & Co. 27
REM
AN
UFA
CTU
RIN
G D
RIV
ERS
PR
OD
UC
TS
EUR
OP
EAN
AU
TO R
EMA
N M
AR
KET
A S
TRO
NG
VA
LUE-
CR
EATI
NG
VIS
ION
Forecast
2014 20172012 2013 20192015
10.1
2016
8.0
2018
7.4
2020
6.57.0
8.79.4
10.811.6
~7%
~8%EUR billionGrowing carpark
& new sales2.3% annual car park growth towards 2020
Longer vehicle lifetime+1 year in average lifetime since 2010
Declining number of accidents
1% annual reduction in accidents since 2010
Structural change Growing aftermarket liberalisation via regul.
Maturing remanu-facturing capabilities
Drives industry promo-tion/knowledge sharing
Global green agendaSupply concern ‘critical’ to EU (focus on CO2)1
1
2
3
4
5
6
Starters Alternators Brake calipers Air-condition compressors
Steering racks Steering pumps EGR valves Steering columns
Vision: Providing the best customer experience in remanufactured automotive solutions
That means:▪ Pan-European availability of a broad program of applications ▪ Product experience and quality in top class ▪ High usability in services and tools in the complete distribution channel▪ Best core return concept▪ Environmental care – in actions and products▪ Competitive price and profitability in the complete distribution channel▪ All provided by competent and responsible people, interdependent and
transparent in relations, striving for continuous improvement.
GPV: Increased use of electronics drives growthNov. 2017Introduction to Schouw & Co. 28
GR
OW
TH A
GEN
DA
EMS
LIFE
CYC
LE
IND
UST
RY
AN
D C
UST
OM
ERS
SELE
CTE
D M
AR
KET
PAR
TIC
IPA
NTS
Establishing in Americas
Active M&Aagenda
GPV 2015 Organic Growth
Larger outsourcing
cases
GPV 2020
850
+1.500
CustomersEMS businessesInput materials
Selected listed peers• SVI (Thailand)• Scanfil (Finland)• Note (Sweden)• Kitron (Norway)
Non-listed• Huge number of local,
European and inter-national market participants
Main input• Electronic components• Printed Circuit Boards• Metal
Suppliers• Many different and
smaller suppliers
Leading internationalB2B companies• ABB• Grundfos• Spectris• Etc.
Production preparation
Prototype and testing
Design and specification
ConceptProduct idea
Phase outLegacySerial productionProduction initiation
Significant growth ambition
Long production cycle
6-24 months
7+ years 1-10 years
▪ Cleantech (e.g. intelligent pumps, smart meters, efficiency enhancing products, battery management)
▪ Instruments & Industry (e.g. instruments for measurements, process control, standalone equipment, logistics to customers’ end customers)
▪ Medico (focus on tractability and certification)
▪ Marine & Defense (extreme conditions - extreme demands)
Industry growth drivers Customer segments
▪ Global EMS market is EUR +500bn with estimated CAGR of 5-7%
▪ OEMs increase focus on core production and outsourcing of non-core production, such as electronics and mechanics
▪ Electronics are used in more and more products among others due to ‘Internet of Things’ and ‘Big Data’
▪ The penetration of electronics and software in B2B products is increasing