Enabling long-term and responsible transformation Schouw & Co. 2020 Q2 ...€¦ · 18/08/2020 · Market leader in spunbond fabrics used in hygiene applications improving everyday

Schouw & Co.

2020 Q2 report

Enabling long-term and

responsible transformation

INVESTOR PRESENTATION

18 August 2020

Vis/skjul grid: ALT+F9

A portfolio of six strong businesses

2

INTRODUCTION

Note: 2019 full-year figures

Quality feed for

fish and shrimps

Fabrics for diapers

and hygiene

Textiles for indus-

trial applications

Electronic Manu-

facturing Services

Hydraulic compo-

nents & solutions

Remanufactured

automotive parts

Aquaculture feed Nonwovens Industrial solutions

Revenue

DKK 11.2bn

Employees

~1,250

~50% of Group EBITDA

Revenue

DKK 2.2bn

Employees

~750

Revenue

DKK 1.7bn

Employees

~1,000

Revenue

DKK 2.9bn

Employees

~3,800

Revenue

DKK 2.1bn

Employees

~1,200

Revenue

DKK 0.9bn

Employees

~1,600

~25% of Group EBITDA ~25% of Group EBITDA


Very strong Q2 profit and cash flow…

3

FINANCIALS

Revenue DKK million EBITDA DKK million Cash Flow from Operations DKK million

181

Borg

-51

-107

2019

Q2

BioMar

42

FPC

-58

FIN

0

Other 2020

Q2

-38

GPV HySp

4,969

4,938

-1%

20

GPV HySp

-10

Borg 2020

Q2

-18

2019

Q2

1

Others

31

BioMar

52

FPC

22

FIN

419

517

+23%

15

-63

GPV

71

128

75

Borg

6

Other

607

2020

Q2

128

FIN

370

2019

Q2

FPCBioMar

5

607

HySp

+375%


…resulting in all-time-high H1 figures

4

FINANCIALS

Revenue DKK million EBITDA DKK million Cash Flow from Operations DKK million

-77

FPC

425

2020

H1

2019

H1

9,740

HySp

-56

Borg

-57

9,645

2

Other

-11

BioMar GPV

-130

FIN

+1%

-18

HySp

0

Others2019

H1

Borg

37

2020

H1

58

BioMar

54

FPC FIN

20

821

951

GPV

-21

+16%

2020

H1

GPV

71

HySp

94

Borg

0

Other

789

FPC2019

H1

228

312

789

93

BioMar

-15

FIN

5

228

+246%


A global leader in quality feed for aquaculture focusing on

responsible use of sustainable raw materials, food safety and

traceability in the entire value chain

BioMar: Strong Q2 but still uncertainty

5

PORTFOLIO COMPANIES

Q2 EBITDA DKK million

▪ 9% volume growth, driven by salmon

▪ LatAm and EMEA affected by corona

▪ Shrimp prices in Ecuador and salmon

prices in Chile challenge customers

▪ Best ever Q2 EBITDA, good mix

▪ Smooth “digital” start-up of factories

in China and Tasmania

▪ LOI to start shrimp feed in Vietnam

▪ Non-consolidated farmer Salmones

Austral hit by low salmon prices

▪ NWC increases due to increase in

activity and geographic/customer mix

▪ ROIC ex goodwill of 18.9%

Q2 revenue DKK billion

2016 2017 20192018 2020

2.31.9

2.5 2.52.7

+9.1%

191

20182016 2017 2019 2020

145 156174

222+11.1%

CAGR

▪ Effect of new capacity in Denmark,

Australia, Chile, Ecuador (pelletised

and extruded) and China

▪ To date, only limited corona impact

but restricted feeding or lower fry

release can limit growth

▪ End-user consumption and HORECA

segment important for future growth

▪ US salmon consumption and China

shrimp import need to be retained

▪ Innovative products/concepts and

close collaboration with customers

remain important for value-creation

Very strong Q2 driven by

salmon division

Positive outlook but also

uncertainty in 2020


Market leader in spunbond fabrics used in hygiene

applications improving everyday health and well-being for

millions of people worldwide

FPC: Very strong demand and outlook

6

PORTFOLIO COMPANIES


▪ Q2 volume increase of 21%

▪ Very strong demand, Asia and Europe

▪ DKK 32m effect from raw. mat. prices

and FX compared to effect in ’19Q2

▪ Positive effects from corona virus with

surging demand for PPE products

▪ FPC do not produce fabrics for masks

but industry is running at full speed

▪ Print activities in US are progressing

but still loss-making

▪ Very solid cash flow from operations

and NWC continues to decline

▪ ROIC ex goodwill improved to 17.1%

Q2 revenue DKK million

2016

506

20192017 2018 2020

433494 486

548+6.1%

201820172016 2019 2020

6982

74 72

124+13.8%

CAGR

▪ Strong demand for hygiene products

set to continue

▪ Customers planning longer than usual

▪ Diaper industry continues move

towards specialty products and FPC

focus on innovation, niche products

and post-treatment applications

▪ Updated 2020 guidance raised to

DKK 390-420m and implies full

capacity utilisation rest-of-year

▪ No effect from raw material prices or

FX included in updated guidance

Very solid Q2, however effect

from raw materials and FX

Current demand pattern

continues throughout 2020


Leading manufacturer of lightweight non-woven fabrics used

e.g. to reduce CO2 emissions in cars, in disinfection wipes, to

improve infrastructure and in filtration to secure clean air

FIN: Offsetting auto with health-care

7

PORTFOLIO COMPANIES


▪ Q2 volume and revenue decline

following corona setback in auto,

furniture and other sectors

▪ Continued strong US performance

▪ Surging sales of wipes and speciality

products, e.g. for face masks

▪ Best ever Q2 EBITDA performance

▪ Global reach with spunlace capacity

in France, Turkey, Brazil and US

▪ NWC continues to decline

▪ ROIC increasing, but still at

unsatisfactory 5.6%


2016 2017 2018 20202019

362 374420 443

392

+2.0%

2017 2018

48

2016 2019 2020

49 52

38

60+5.7%

CAGR

▪ Balanced product portfolio and two

main production technologies

▪ Continued move towards value-added

speciality products

▪ Strong operational efficiency and

ongoing adjustment of capacity

▪ Nanoproducts continue to develop

with very promising potential

▪ Demand for disinfection wipes, face

mask fabrics and advanced filtration

solution to continue beyond 2020

Very positive Q2 with strong

sales in health-care products

Positive 2020 outlook with good

industry fundamentals


European top 10 EMS company serving global industrial and

cleantech customers from Asian factories with significant

better-than average health & safety and working conditions

GPV: Varying demand from global customers

8

PORTFOLIO COMPANIES


▪ Revenue down with 5%

▪ Soft demand from large industrial

customers across markets

▪ Effect from temporary close of sites

(China and Sri Lanka) and lower

activity from lockdowns

▪ Increase in Q2 EBITDA, partly due to

soft comps (PPA and FX in 2019)

▪ Integration continues smooth, now

implementing a Manufacturing

Execution System at all sites


2017 20182016

714

2019 2020

218286 297

676+32.7%

62

2016 2017 20192018

27

2020

13

24

42

+48.5%

CAGR

▪ Soft demand from several global

customers in different segments

▪ Very interesting potential in MedTech

with existing customers

▪ Continued investment in efficiency

and automatization

▪ Order intake and H2 performance

depends on European and North

American business activity

▪ Uncertainty might continue beyond

2020

▪ Crises tend to increase use for

outsourcing

Q2 affected by corona with soft

demand from many customers

2020 profitability uplift despite

soft revenue outlook


Leading Nordic hydraulic component and solutions specialist

servicing wind turbine and other cleantech customers globally

HydraSpecma: High activity in wind segment

9

PORTFOLIO COMPANIES


▪ Q2 revenue declined 19%

▪ EBITDA declines DKK 18m, however

still at 2018Q2 level despite DKK

100m lower sales

▪ Wind segment continues to be solid

▪ Large vehicle segment (busses,

trucks, off-highway) very soft

▪ Strong effort on cost cutting and

streamlining efficiency

▪ NWC reduced and strong cash flow

from operations of DKK 86m


20192016 2017

550

2018 2020

466 457

565

458

-0.5%

2016 2017 20202018 2019

4337

48

64

46

+1.4%

CAGR

▪ Ongoing optimisation of logistics and

production network and footprint, new

site in Gothenburg following plan

▪ Good outlook in wind segment and

other stationary equipment

▪ Slow ramp up in vehicle OEM

▪ Focus on electrical products to

complement hydraulic core business

▪ Significant uncertainty in outlook

regarding OEM’s 2020 ac

Lower activity in vehicle

segment gives soft Q2 figures

Recovery expected but corona

effects throughout 2020


European leader in remanufacturing of automotive parts in a

business model fundamentally build on circular economy

Borg: Soft demand but European strength

10

PORTFOLIO COMPANIES


▪ All markets have seen very low

demand during lockdown periods

▪ No cars on the road, no cars to repair

▪ Significant EBITDA declined directly

linked to lower volumes

▪ Factory in UK closed for 2 months

▪ Polish site on reduced manning and

significant distancing measures

▪ Good relationships to key customers

▪ Very solid cash flow from operations

of DKK 75m following NWC reduction


2018 20202016 2017 2019

225247

268232

173

-6.3%

2016 2017 2018 2019 2020

36

13

41

21

11

-25.7%

CAGR

▪ Strong effort on productivity and cost

cutting across all functions

▪ ~200 FTEs fewer than LY

▪ Demand starting to pick up

▪ Crises tend to increase mileage and

age of car fleet

▪ Ongoing IAM customer consolidation

▪ Full market recovery earliest at Q4

Significant effect from

European lockdowns

Recovery to happen but full

demand is still distant


Decline in sales to new cars offset by

increase in hygiene and health-care products

Volume

EBITDA

Significant sales decline due to corona

lockdowns limiting driving activity

Volume

EBITDA

Global demand for PPE products

exploded since corona outbreak

Volume

EBITDA

Conglomerate corona implications

11

PORTFOLIO COMPANIES

2019 Q1

2020 Q2

2020 Q1

2019 Q2

2019 Q3

2019 Q4

+21%

2019 Q3

2019 Q4

2020 Q2

2019 Q1

2019 Q2

2020 Q1

+72%

2019 Q2

2020 Q1

2019 Q1

2019 Q3

2019 Q4

2020 Q2

-24%

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

-47%

2019 Q3

2019 Q2

2019 Q1

2020 Q2

2019 Q4

2020 Q1

-13%

2020 Q2

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

+58%

Guidance reinstated

12

OUTLOOK

2019

realised

2020 original

susp. range

2020Q2

range

Midpoint deviance

to org. guidanceIndicated after 2020Q1

BioMar 966 1,000-1,060 940-1,000Revenue might fall short of guidance, earnings still at

attractive level, EBITDA range will be challenged, in Danish "den oprindelige forventning vil blive udfordret"

FPC 352 280-310 390-420Unchanged revenue, EBITDA increased guidance to DKK 320-360

FIN 141 165-185 205-225Revenue down DKK ~150m, EBITDA expected

slightly short of original expectation, in Danish "lidt under det forventede interval"

GPV 196 210-240 200-230Decline in both revenue and EBITDA expected,

impact depends on corona, in Danish "under det forventede interval"

HySp 215 200-220 160-180Revenue down DKK ~200m and EBITDA somewhat

below original range, in Danish "noget under det

forventede interval"

Borg 110 110-120 75-85Sharp decline in both revenue and EBITDA expected,

severe setback in Q2, in Danish "væsentlig reduktion..."

Other -29 -30 0 No change expected

Total 1,951 1,935-2,105 1,940-2,110 Group financial guidance temporarily suspended

-60

+110

+40

-10

-40

-35

+5

0


Globalise and

create platform

Utilise new

capacity

Utilise strong

platform

Continue long-

term growth

Regain volume

in Europe/Asia

Further

innovation

Transform and

improve Sweden

Optimise

footprint

Focus and

capture value

Leverage on

investments

Regain top line

momentum

Expand in new

products

Status on the priorities for 2020

13

OUTLOOK

▪ Maintain positions and keep volumes

▪ Streamline costs and margin mgmt.

▪ Fix underperformersProfit

improvement

▪ Capital allocation to ongoing

transformation

▪ Invest to secure long-term

competitiveness

Growth

investments

▪ Reduce NWC

▪ Generate cash flow

▪ Improve ROICCapital

optimisation

▪ Secure financial and management

resources

▪ Create value from ESGFuture-

proofing

✓

!

✓ ✓

✓

✓

✓

✓

✓

!

!

2025 Build Future

SOLUTION PROVIDER

2020 Go Strong

COMPONENT SUPPLIER

INTEGRATION ARCHITECT2030 Next Transformation

THE JOURNEYSCHOUW & CO. TOWARDS 2030

Responsible growth

Sustainable profit

Lasting investments

Long-term value

Orchestrate and empower

Inspire and focus

Results are created by people

Aktieselskabet Schouw & Co.

Chr. Filtenborgs Plads 1 8000 Aarhus C Denmark

+45 86 11 22 22

[email protected]

www.schouw.dk

www.linkedin.com/company/schouw

Nasdaq Copenhagen ticker SCHO

Enabling long-term and responsible transformation

Documents

Enabling long-term and responsible transformation Schouw & Co. 2020 Q2 ...€¦ · 18/08/2020 · Market leader in spunbond fabrics used in hygiene applications improving everyday