developing leading danish businesses through long …...2018/12/05 · in baby diapers, femcare and...

Introduction to

Schouw & Co.

Developing leading Danish businesses

through long-term and active ownership

INVESTOR PRESENTATION

5 December 2018

Kasper Okkels, VP Business Development, Strategy & IR

Danske Bank Winter Seminar

Schouw & Co. at a glance

2

INTRODUCTION

HISTORY

FINANCIALS

FOOTPRINT

140years of

company history

years in

packaging

125years as a

conglomerate

30

17.0billion DKK

revenue (2017)

billion DKK

EBITDA (2017)

1.6% ROIC

ex. goodwill (2017)

17.6

~7,000employees across

the globe

countries with

production sites

25major long-term

shareholders

2

25countries

with

production

7,000employees

2major

long-term

shareholders

Schouw & Co. value proposition

3

INTRODUCTION

1

2

3

4

6

5

Diversified portfolio

Leading B2B businesses

Europe based, global outlook

ROIC focused

Financially strong

Active/long-term ownership

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 goals

4

INTRODUCTION

10 years of development

5

INTRODUCTION

9.5

151008 1211

14.4

09 13 14 16 17

9.88.4

11.9 12.511.6 11.8 12.6

17.0CAGR +6.3% 20%

08 141110 161209 13 15 17

4%

7%

10%

18%

14%15% 16% 17%

18%

+10.4pp

124190

369

646772

685 708831

0908 1310 11 12 14 15 16 17

1,0381,093

CAGR+27.4%

08 09 13 1410 11

2,375

12 15 16 17

2,0003,5113,188

2,173

5,3136,812

9,131

12,489

13,939

CAGR+24.1%

1308 14

-0.4

2.9

09 12

1.7

10 11 15 16 17

3.94.0

2.6

0.0 0.0

-0.7

0.8

-3.2 times

08 1109 1510 1312 14 16

2,139

17

3,7433,2873,334 3,166

2,873

2,0522,382

4,108

6,087CAGR+5.6%

Revenue (DKK billion) ROIC ex goodwill FTEs (yearly average)

EBIT (DKK million) NIBD/EBITDA Market Capitalisation (DKK million, end of year)

The strategic journey of Schouw & Co.

6

INTRODUCTION

Bigger and stronger

portfolio

Consolidating the

conglomerateGo StrongDiversification

1988 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

Ownership

7

INTRODUCTION

GivescoMain shareholder for more than 40

years; controlled by the Eskildsen

family

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%

6%51%

15%

6%

28%

51%

8

Best

ownership

Active

ownership

Responsible

ownership

Diversified portfolio

5-7 businesses

Profitable growth

Efficient use of capital

Financial versatility

Future-proofing

Results are created by people

Ownership model

▪ Independent businesses

▪ Leading in niche/segment

▪ Revenue DKK +1bn

▪ Global outlook

▪ Growth every year

▪ Profit on par with the best

▪ Optimising working capital

▪ Make the asset sweat

▪ NIBD/EBITDA 1-2x

▪ Corporate Responsibility

▪ HR transformation

▪ From volume to value

INDUSTRYB2B with preferences for pro-

cessing industry & logistics

SIZERevenue potential of

minimum 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

INTRODUCTION

9

The portfolio

10

INTRODUCTION

Fish Feed Nonwovens Industrial solutions

>40%

of 2018E EBITDA

~30%

of 2018E EBITDA

<30%

of 2018E EBITDA

~55%

of 2018E sales

~20%

of 2018E sales

~25%

of 2018E sales

BioMar: Global #3 in fish feed

11

PORTFOLIO BUSINESSES

+1 million

tonnes

DKK

10bnDKK

690-715m

around

1,1003.4% CAGR

2013-2017

Volume Sales EBITDA 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

BioMar: Long-term growth outlook

12


Salmon

Chicken

Pig

Beef

2

1.2

3

5-7

Feed Con-

version Rate1

Edible

yield2

Energy

retention3

70%

40%

45%

50% 13%

23%

10%

5%

Aquaculture: 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

▪ Expansion into new

markets/species is key to the

growth agenda

Salmon farming is very effective

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.

Fibertex Personal Care: Global spunbond

13


~120,000

tonnes

DKK

~2.1bnDKK

310-320m

around

700~5% CAGR

2013-2017


▪The World’s #5 manufacturer of spunbond nonwoven

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 awareness

increases the demand for Fibertex Personal Care’s

products

Spunbond

Print

FPC: Growth in Asian market

14


17%42%16%

18%

Asia

Rest

58%

9%

Rest

29%12%

Europe

Top 3 market participants in Asia and Europe

Baby Femcare Incontinence

~70% ~10% ~20%

~10%

~1%

~4%

~1%

~7%

~6%

CAGR

2015-20

46%

34%

RoW

20%

Asia

Europe 21%

56%

23% 44%

31%

25%

Volatile Asian growthSpunbond hygiene categories

Q3 1

2

Q3 0

8

Q1 0

7

Q3 1

8

Q3 1

7

Q3 1

4

Q1 0

9

Q2 0

7

Q1 1

1

Q2 1

7

Q3 0

7

Q3 1

1

Q4 1

9

Q1 1

5

Q4 1

6

Q2 1

5

Q2 0

8

Q2 2

0

Q4 1

5

Q1 0

8

Q4 0

8

Q2 0

9

Q1 1

4

Q3 0

9

Q1 2

0

Q4 0

9

Q4 1

7

Q1 1

0Q

2 1

0Q

3 1

0

Q3 2

0

Q4 1

0

Q4 2

0

Q1 1

8

Q2 1

1

Q4 1

1

Q1 1

3

Q1 1

2

Q4 1

8

Q2 1

8

Q2 1

9

Q3 1

6

Q4 1

4

Q1 1

6

Q3 1

5

Q4 0

7

Q4 1

3Q

3 1

3

Q2 1

6

Q4 1

2

Q2 1

4

Q3 1

9

Q1 1

7

Q2 1

2

Q1 1

9

Q2 1

3

CAGR +11%

CAGR +11%

FPC Malaysia sales

2019

2006

2017

2000

2001

2011

2018

2002

2022

2012

2003

2004

2005

2015

2007

2008

2009

2010

2013

2014

2016

2020

2021

Supply

Over/Under Supply

Demand

Total Asian supply/demand

Fibertex Nonwovens: Industrial applications

15


~60,000

tonnes

DKK

~1,575mDKK

180-190m

around

1,000~10% CAGR

2013-2017


▪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: Nordic hydraulic knowledge

16


~5 million

hoses

DKK

~2.0bnDKK

180-190m

around

1,200~30% CAGR

2013-2017


▪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 Automotive: Europe’s largest remanufacturer

17


~2 million

cores

DKK

~1.bnDKK

135-145m

around

1,500~10% CAGR

2013-2017


▪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

GPV: Nordic Top3 LVHM EMS/box build

18


~10 million

finished goods

DKK

~1.2bnDKK

125-130m

around

1,4005.1% CAGR1

2012-2016


▪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

Facts about CCS

19

Introduction to CCS Geographical presence

Europe Asia

HQ and EMS production, 300 FTE

EMS production, 130 FTE

Cable harness, 230 FTE

EMS and cable harness, 470 FTE

EMS production, 1,000 FTE

EMS production, 170 FTE

Top 25 European EMS provider and leading in German-speaking Europe

Strong presence in the entire EMS value chain, including design capabilities

Diversified customer base; top 20 customers account for 60% of sales

Low-cost production setup in Europe (Slovakia) and Asia (Sri Lanka and China)

Owned by Private Equity since 2011; growth by bolt-on acquisitions

2017

~1,600

2018E

~1,400

+15%

2018E2017

~100

~125

+20%

Sales (DKK million) EBITDA (DKK million)

From leading Nordic to leading European

20

Combined an European top 10 EMS player

GPV: 80% of

customers have HQ

in Northern Europe

CCS: 80% of

customers have HQ

in DACH (Germany,

Austria, Switzerland)

✓

✓ ✓

✓

✓✓

✓

✓ ✓

✓

✓✓

✓

High-mix and low-medium volume EMS

In-house mechanics competencies

In-house cable and harness competencies

Focus on box-build products

Trust and reliability are key values

Industrial focus / recurring business

Engineering, test strategy, prototyping

In-house product development/design

Large blue-chip customers

GPV CCS

✓

✓

▪ Danish HQ with a global reach

▪ Growth and profitability at industry benchmark

▪ Low-cost setup on three continents, with global

customer proximity

▪ Scale in all operational sites

▪ Synergies mainly from scale (e.g. sourcing)

and by cross selling (footprint and capabilities

in box-build, mechanics and test)

▪ Expand customer offerings in product design

and innovation

GPV

~1,600

Pro formaCCS

~1,225

+2,800

more than double

Sales (2018E, DKK million) EBITDA1 (2018E, DKK million) Employees (FTE)

Pro formaGPV

~125

CCS

125-130

~250

double

CCSGPV

2,300

Pro forma

1,400

3,700

more than double

Strong strategic complementary fit

Transaction highlights

▪ Enterprise Value about DKK 800m

▪ EV/EBITDA(18E) ~6.4x

▪ Guidance on 2019 figures in combination

with Schouw & Co. 2018 annual report

(March 2019)

▪ PPA, transaction costs, etc. will be

communicated at a later stage

▪ Clearwater International acted as buy-side

advisor for GPV/Schouw & Co.

Notes: 1) GPS’s 2018 EBITDA guidance of DKK 125-135 is before transaction costs, any impact from Purchase Price Allocation and other transaction related effects

Solid strategic opportunities

21

OUTLOOK

Growing global

demand for

farmed fish

Scale and synergies

in Nordic hydraulic

leadership

Global green agenda

and focus on

circular economy

Increased use of

lightweight nonwoven

fabrics in e.g. cars

Outsourcing trend

and growth from

IoT, Big Data, etc.

Hygiene awareness

in Asia’s growing

middle class

Updated 2018 guidance

22

OUTLOOK

2018 Q3 2018 Q2 2018E 2017R 2016R

10,000 10,000 10-10.5b 9,955 8,867

2,100 2,100 2,100 2,016 1,792

1,575 1,600 1,600 1,422 1,301

2,000 2,000 1,900 1,805 1,747

1,000 1,025 1,025 709 -

1,225 1,225 1,225 1,148 668

- -23 -6

17,900 18,000 18,100 17,032 14,369

2018 Q3 2018 Q2 2018E 2017R 2016R

BioMar 690-715 665-705 720-770 712 722

Fibertex Personal Care 310-320 310-330 350-370 365 362

Fibertex Nonwovens 180-190 195-205 195-215 179 162

HydraSpecma 170-180 165-185 155-175 148 170

Borg Automotive 135-145 155-175 155-175 89 -

GPV *125-130 125-135 125-135 107 44

Other -30 c. -35 c. -35 -32 -24

Total EBITDA 1,580-1,6501,580-1,7001,665-1,805 1,568 1,472

PPA depreciation -85 c. -85 c. -85 -64 -43

Other depreciation -455 c. -460 c. -470 -411 -391

Total EBIT 1,040-1,1101,035-1,155 1,110-1,250 1,091 1,038

Associates, etc. 75 c. 55 c. 55 42 566

Other financial items -75 c. -65 c. -45 -30 -27

Profit before tax 1,040-1,1101,025-1,1451,120-1,260 1,105 1,578

Profit Revenue

* Before transaction costs of DKK ~10m

Long-term targets

23

OUTLOOK

7.5%

6%

18%

15%

15%

9%

17.5%

12%

10%

7%

13%

10%

EBITDA

EBIT (pre PPA)

3-6% 7%7-8%5% 5-7%5-7%Industry

growth

Maintain position and build competitive strength by focus

on operational streamlining and margin management and

on sustaining strategic development from volume to value

2018 focus areas remain intact

24

OUTLOOK

Build strength

Allocate capital for growth and review future capacity

expansion to ensure a strong platform for long-term value

creation

Invest to prepare for the future and put innovation and

digitalisation on the agenda in all our businesses

Allocate capital

Innovation

1

2

3

Drive ‘intelligent synergies’ in financing, accounting,

strategy, acquisition and developing our organisations and

talent across all businesses

Develop across

all businesses

4

Ensure financial resources for future investments in both

maintaining and expanding capacity and in large and small

acquisitionsInvestments

5

Strict cost focus

across all businesses

Profitability and cash

generation top of the

agenda

Securing future

profit remain a

key focus area

Harvest value and using

scale, e.g. in NWC

optimisation

More prudent view on

capex and M&A

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

Results are created by people

developing leading danish businesses through long …...2018/12/05 · in baby diapers, femcare and...

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