First half of 2017 Investor presentation AUGUST 2017 CEO JENS - - PowerPoint PPT Presentation
First half of 2017 Investor presentation AUGUST 2017 CEO JENS BJERG SRENSEN | IR KASPER OKKELS 2017H1 interim report 17.08.2017 2 Our value proposition Diversified portfolio 1 25 25 6,5 ,500 2 Leading B2B businesses 2 countries
Investor presentation
AUGUST 2017 CEO JENS BJERG SØRENSEN | IR KASPER OKKELS
countries with production
employees
major long-term shareholders
2
1 2 3 4 6 5
Diversified portfolio Leading B2B businesses Europe based, global outlook ROIC focused Financially strong Active/long-term ownership
17.08.2017 2017H1 interim report
17.08.2017 2017H1 interim report 3
Revenue DKK
Growth 25% // 2016H1: 6.1bn Both organic and acquisitive growth
EBIT DKK
Growth 12% // 2016H1: 372m Effect from high investment level
Cash Flow to Investments DKK
Effect from acquisition of Borg Automotive and capacity expansions in BioMar, FPC and GPV
NIBD/EBITDA
NIBD increases due to acquisitions, higher activity, and seasonality in supply chain financing
Outlook for 2017
2017FY EBIT guidance maintained or higher in all businesses and maintained at Group level
Return on Invested Capital
ROIC incl. goodwill 16.1% ROIC remains comfortably above 15% target
6,148 +25.3% 2017 7,706 GPV Other 329 Borg 2 247 HySp Bio- Mar 56 75 FPC 14 FIN 838 2016
Revenue (DKKm) EBIT (DKKm, after PPA) Comments ▪ Revenue grows 25% due to solid increase in volume in BioMar and effect from acquisitions ▪ Borg included from 2017Q2 and GPV consolidated from 2016Q2 ▪ Organic revenue increases 17% ▪ EBIT improved by 12% (6% organic) ▪ Negative effect on EBIT from Purchase Price Allocations in 2017H1
▪ Overall, satisfactory development in all businesses, both the ‘old’ ones and the newcomers
17.08.2017 4 2017H1 interim report
FIN 417 FPC Other 11 2017 GPV +12.0% 30 41 5 23 Bio- Mar 5 372 Borg 2016 HySp 2
Other +18.0% 2,353 Borg FIN FPC 74 Bio- Mar 17 2 45 HySp 4 220 2017 35 GPV 1,993 2016
Net Working Capital (DKKm) ROIC (percentage) Comments ▪ NWC increases mainly due to effect from Borg Automotive ▪ Generally, increase in NWC reflects higher level of activity in all businesses ▪ ROIC excl. goodwill increases to 19.6% (2016H1: 19.1%) and incl. goodwill increases to 16.1% (2016H1: 15.6%) ▪ All businesses except FIN currently meets Schouw & Co.’s 15% ROIC target
17.08.2017 5 2017H1 interim report
15.1 14.2 FIN 8.2 7.4 FPC 19.6 GPV 17.9 HySp 13.5 15.9 Schouw 16.1 38.3 26.0 BioMar 18.2 ROIC excl. goodwill ROIC incl. goodwill 15%
Notes: No ROIC figures for Borg Automotive as a consequence of a required change in accounting principles
17.08.2017 2017H1 interim report 6
Development in NIBD DKKbn
0.9 NIBD 30 Jun 2017 Dividends Investments in 2017H1 0.3 0.5 1.2 0.02 0.1 Acquisition
BHE Other (Alimentsa prepayment) CF
2017H1 Sale of Kramp and SMB CF
2016H2 0.6 0.6 NIBD 31 Dec 2016
NIBD 30 Jun 2016 1.1 1.1 Investments in 2016H2
Selected investments1 BioMar expansion in Karmøy, Norway DKK ~350m Fibertex Personal Care in Sendayan, Malaysia DKK ~400m Fibertex Nonwovens expansions and line upgrades DKK ~125m GPV in Guadalajara, Mexico and new SMT capacity DKK ~50m
Notes: 1) Some of the investments lies outside the 2016H1-2017H1 period.
17.08.2017 2017H1 interim report 7
8.1 2017 2016 2015 13.2 9.2 2013 2014 6.7 13.8
H1 NWC (% of LTM rev.)
26.0 38.3 21.8 2013 2016 16.9 2017 +21.4 2015 2014 24.4
H1 ROIC (ex goodwill %)
1,900 +4.6% 2017 2,273 2015 2016 2,230 2014 1,901 2013 1,837
Q2 revenue (DKKm)
111 78 79 68 122 2017 +15.9% 2015 2014 2016 2013
Q2 EBIT (DKKm) Q2 and H1 comments ▪ Volume increases 28% H1, driven by increase in market shares and growth in salmon markets ▪ EBIT increases 10% in Q2 and 30% in H1 despite very tough competition, especially in salmon ▪ CF from Operations Y/Y low due to seasonality in NWC/supply chain financing and tax prepayment ▪ Guidance maintained, several one-offs in 2016 Strong financial develop- ment ▪ Solid order position and strong sales concepts ▪ Karmøy extension enables growth opportunities ▪ Strong position in European non-salmon markets ▪ Long-term growth investments in LatAm shrimp, China, salmon in Australia, etc. ▪ Closing of Alimentsa acquisition expected in H2 Solid position but fierce compe- tition
17.08.2017 2017H1 interim report 8
2014 16.8 2015 2017 2016 12.7 15.7 2013 +2.9 14.6 18.5
H1 NWC (% of LTM rev.)
2014 12.9 15.8 2013 2015 23.4 15.4 2016 2017 15.1
H1 ROIC (ex goodwill %)
494 433 404 421 392 2016 +5.9% 2017 2013 2015 2014
Q2 revenue (DKKm)
45 34 34 37 54 2015 +9.9% 2014 2017 2016 2013
Q2 EBIT (DKKm) Q2 and H1 comments ▪ Flat spunbond volume but revenue increase following increase in polypropylene prices ▪ Negative raw material effect on EBIT as expected ▪ Production on new site in Malaysia ahead of time ▪ FY EBIT outlook raised with DKK 10m following effect from new capacity in Malaysia and expectation of lower raw material prices H1 as expected ▪ Strong demand for print in both Europe and Asia, US establishment announced earlier this week ▪ Print volumes in 2017H1 80% higher than 2016H1 ▪ Smooth installation of 20kt spunbond line in Malaysia will have effect already in 2017Q4 ▪ Super-soft products (loft) can now be manufactured both in Denmark and Malaysia Print and speciality drives value
17.08.2017 2017H1 interim report 9
28.5 2013 31.9 29.8 30.5 2015 2014 2017 2016
30.9
H1 NWC (% of LTM rev.)
2017 3.6 7.1 2015 9.4 7.1 2014 2016 2013 +4.6 8.2
H1 ROIC (ex goodwill %)
374 362 328 267 246 2016 +11.0% 2014 2015 2017 2013
Q2 revenue (DKKm)
29 25 16 10 27 +29.1% 2015 2013 2017 2014 2016
Q2 EBIT (DKKm) Q2 and H1 comments ▪ Modest 8% increase in H1 revenue partly driven by increase in raw material prices ▪ Still solid demand in auto and advanced products ▪ EBIT at 2016 level, difficult to compensate increasing raw material prices ▪ Guidance unchanged, but uncertainty from volatile raw material prices (PP, PET, viscose) Stable Q but more uncer- tainty on
▪ Still negative EBIT in South Africa, however, significant improvement on 2016 level ▪ New capacity in CZ for future auto products ▪ Progress in US operation, solid customer base ▪ Continued development of value-added products ▪ Innovation pipeline and new product applications remain strong Long-term route to meet targets
17.08.2017 2017H1 interim report 10
2017 28.1
28.0 2015 2016 37.1 2013 38.8 32.2 2014
NWC (% of LTM revenue)
15.9
2016 20.6 2017 23.8 2015 2014 16.5 22.3 2013
ROIC (excl. goodwill %)
457 466 151 147 124 2017 +38.5% 2016 2015 2014 2013
Q2 revenue (DKKm)
29 19 18 15 22 2017 2014 2013 2016 +11.0% 2015
Q2 EBIT (DKKm) Q2 and H1 comments ▪ Revenue at 2016 level with 2% increase in H1 ▪ Stable development in most segments, however, softer demand in Wind and Marine segments ▪ EBIT lower than 2016 level mainly due to lower activity, investment in organisation and challenging Chinese sales ▪ FY EBIT guidance maintained Solid Q1, softer Q2 ▪ Specma acquisition has transformed Hydra to a Nordic leader supplying many attractive segments ▪ Integration/streamlining of Specma progresses as planned with continued production relocation and cost optimisations ▪ Sourcing synergies continues to be harvested, cross selling projects next in line A trans- formed Hydra
17.08.2017 2017H1 interim report 11
2017 2014 2013 2015 2016 23.2
NWC (% of LTM revenue)
2017 2016 2015 2013 2014
ROIC (excl. goodwill %)
248 225 2014 2016 2013 2017 2015
Q2 revenue (DKKm)
33 42 2015 2016 5 2014 37 2013 2017
Q2 EBIT1 (DKKm)
Notes: 1) Adjusted for DKK 37m in Purchase Price Allocation in 2017Q2
Q2 and H1 comments ▪ Borg consolidated from beginning of 2017Q2 ▪ Revenue 10% above 2016 level and EBIT before PPA 27% higher than 2016Q2 ▪ Solid demand and strong sales both in IAM (Independent After Market) and OES ▪ Revenue guidance now DKK 700m following change in accounting principles, EBIT unchanged Good financials in its first quarter in Schouw ▪ Europe’s largest independent remanufacturing businesses with locations in DK, UK, BE and PL ▪ Ongoing evaluation and extension of product range ▪ Strategic thinking in new context following new
▪ Organic growth in Europe remains top priority Focus on
growth
N/A due to required change in accounting principles
17.08.2017 2017H1 interim report 12
2017 2016 20.8 2014 2013 2015 22.4
NWC (% of LTM revenue)
2016 2017 14.2 2015 2013 2014 18.2
ROIC (excl. goodwill %)
287 218 219 2017 2015 2014 2013 2016 +14.4%
Q2 revenue (DKKm)
20 7 10 2017 7 2015 14 2016 2014 2013
Q2 EBIT1 (DKKm)
Notes: 1) Adjusted for DKK 7m in Purchase Price Allocation in 2016Q2
Q2 and H1 comments ▪ GPV consolidated from beginning of 2016Q2 ▪ Revenue up ~30% with strong order intake ▪ EBIT significantly above 2016 ▪ Seamless integration of recently acquired BHE ▪ 2017FY guidance upwards adjusted; revenue up by ~5% and EBIT by ~20% Strong financials ▪ GPV is Denmark’s biggest EMS supplier with solid global growth outlook ▪ Strong position in the “three” global time zones ▪ Mexican site now fully operational ▪ SMT capacity extended in both Thailand and Denmark during 2017H1 Growth agenda
DKK million
2017 updated guidance 2017 after Q1 2016 actual BioMar 510-550 510-550 581 Fibertex Personal Care 250-270 230-260 246 Fibertex Nonwovens 80-100 80-100 81 HydraSpecma 100-120 100-120 111 Borg Automotive 60-80 60-80
60-70 50-60 44 Other
Sum of intervals 1,025-1,155 995-1,135 1,038 Group EBIT gudidance 1,065-1,135 1,065-1,135 Associates etc.
566 Financial items, net
Profit before tax 1,020-1,150 975-1,115 1,578 *1
Notes: *1) Including DKK 24m from PPA effect in Specma; *2) 9-month effect after PPA of DKK ~50m in 2017; 3) GPV only recognised in 9 months of 2016; *4) Associates in 2016 includes sale of shares in Kramp and SMB
*2 *4 *3
17.08.2017 2017H1 interim report 13
*2 Comments ▪ Fibertex Personal Care and GPV raises its EBIT guidance for 2017FY ▪ Group EBIT maintained at DKK 1,065-1,135m which is the upper half
businesses ▪ No effect from BioMar’s not yet closed acquisition of Ecuadorian shrimp feed producer Alimentsa ▪ Non-cash regulations from Purchase Price Allocations amount to DKK 57m at 2017H1 and DKK ~90m at 2017FY before any effect from Alimentsa
Fish feed Hygiene spunbond Industrial nonwovens Hydraulics EMS Auto rema- nufacturing
14 Source: Schouw & Co. estimates from various sources
24 20 2015 ~4% 2020 2015 ~5% 2020 2.5 2.0 3.3 2.3 2020 2015 ~8% 71 53 2015 ~6% 2020 ~6% 2020 450 350 2015
Global GDP growth (2015-20) ~3.5%
Volume (m tonnes) Value (USD bn) Volume (m tonnes) Volume (m tonnes) Value (USD bn)
17.08.2017
44 32 2020 2015 ~7%
Value (USD bn)
2017H1 interim report
BioMar
Fibertex Personal Care
Fibertex Nonwovens
HydraSpecma
GPV
Borg Automotive
15 Note: Pre-PPA EBIT targets. Borg Automotive long-term EBIT target subject to change as the company is very new in the portfolio. 17.08.2017 2017H1 interim report
16
Growing global demand for farmed fish Scale from inte- gration of recently acquired Specma Global green agenda and active ownership potential Consolidation and leverage on scale and investments Value-creating growth and trans- formation in EMS
17.08.2017 2017H1 interim report
Hygiene awareness in Asia’s growing middle class