Schouw & Co. 2017 Q1 Investor presentation MAY 2017 CEO JENS - - PowerPoint PPT Presentation

Schouw & Co. 2017 Q1

Investor presentation

MAY 2017 CEO JENS BJERG SØRENSEN | IR KASPER OKKELS

2017 Q1 interim report Schouw & Co. introduction Businesses in the portfolio

Agenda

Schouw & Co. 2017Q1

+29% 3.584 2.776 2017Q1 20.0% +1.8pp 18.2% 2016Q1 178 157 +13%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ A good quarter as expected ▪ Revenue up 29% (organic 20%) and EBIT up 13% (3% organic) ▪ GPV not consolidated in 2016Q1 ▪ Very satisfactory increase in ROIC, now 20.0%/16.6% excl/incl goodwill ▪ Net cash position by end of Q1 – NIBD effect from Borg DKK ~1.1bn ▪ 2017 will be a year of consolidation and integration ▪ Expanding capacity and investing in the future platform ▪ Borg Automotive will be a new leg from Q2 – value creating acquisition at EV/EBITDA17E multiple of 6.8x ▪ Unchanged outlook in all businesses ▪ Total guidance raised following inclusion of Borg ▪ Revenue now expected at DKK 16.4bn ▪ Upper half of EBIT range still most likely; DKK 1.065-1.135m

08.05.2017 Schouw & Co. Q1 Interim Report 3

BioMar 2017Q1

+30% 1.997 1.532 2017Q1 38.2% +15.9pp 22.3% 2016Q1 52 22 +134%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ Revenue increases 30% to DKK 2bn driven by 24% increase in volume ▪ EBIT more than doubles from DKK 22m to 51m ▪ Strong development in the salmon division, continued effect from margin management and increased sale of functional feeds ▪ Attractive ROIC, low NWC following longer creditor days ▪ BioMar’s strategy focusses on innovation & expansion ▪ Strong feed concepts and solid portfolio of functional feeds ▪ Building the world’s largest fish feed factory at Karmøy site ▪ Establishing in China through Tongwei JV, 50k t factory and acquisition ▪ Announcement of green field establishment in Australia – 110k t by 2019 ▪ Unchanged outlook with revenue above DKK 9.4bn and EBIT 510-550m ▪ Volume growth is expected – primarily in the salmon region ▪ Q2 is high season for contract renewals –big volumes at play ▪ Underlying core earnings to exceed 2016 level when adjusted for one-

• ffs from R&D activity/grants and reversal of debtor provision

08.05.2017 Schouw & Co. Q1 Interim Report 4

Fibertex Personal Care 2017Q1

473 458 +3% 2017Q1 15.3% +-7.7pp 23.0% 2016Q1 55 87

• 37%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ Revenue increases 3% to DKK 473m despite lower volumes ▪ EBIT of DKK 55m and lower than LY as expected ▪ Higher raw material prices increases revenue but decreases EBIT; total deviation of about DKK 20m (2017Q1 -9m and 2016Q1 +11m) ▪ Solid global demand for printed products and progress in Innowo ▪ FPC has a solid long-term road map for profitable growth ▪ New line in Malaysia - the 5th in Malaysia, 25 km from the existing; total investment of DKK 400m; ready around year-end ▪ Global increasing demand for print – looking into business plans for further expansion ▪ Revenue about DKK 2bn driven by increase in volumes ▪ EBIT of DKK 230-260m ▪ Volatile raw materials can impact profitability – expect to catch up on loss on raw materials in Q1

08.05.2017 Schouw & Co. Q1 Interim Report 5

Fibertex Nonwovens 2017Q1

382 338 +13% 2017Q1 8.3% +1.3pp 7.0% 2016Q1 30 23 +32%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ Revenue increases 13% to DKK 382m with sales up in all markets, including US and South Africa, and solid demand in auto ▪ EBIT up by 7m to DKK 30m following higher activity and product mix ▪ South Africa – the historically weak spot – is progressing and has reached EBITDA break-even ▪ Ongoing transformation “from volume to value” ▪ Investing in segments like auto, composite, filtration, nano and acoustic ▪ New capacity in the Czech Republic supports growth in value segments ▪ Optimistic but realistic outlook for 2017 ▪ Revenue DKK 1.4bn and EBIT DKK 80-100m ▪ Increased likelihood of ending in the upper end of the range ▪ Currently struggling with adequate compensation from higher PP and polyester prices

08.05.2017 Schouw & Co. Q1 Interim Report 6

HydraSpecma 2017Q1

476 453 +5% 2017Q1 16.8% +-6.8pp 23.6% 2016Q1 36 30 +19%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ Revenue up 5% to DKK 476m and EBIT increases to DKK 35m ▪ Progress in most countries as well as OEM and aftermarket ▪ Effect from higher activity and synergies secures ROIC above 15% ▪ NWC at same level as LY despite increase in activity ▪ Purchase Price Allocation of about DKK 6m ▪ Solid Nordic position – and progressing global expansion ▪ Investing in organization, scale and operational excellence ▪ Increasing activity in China following acquisition of Etola in 2016 ▪ Optimising factory footprint and utilising cross-sales opportunities ▪ The business in the portfolio most dependent on the business cycle ▪ Currently good outlook in automotive and wind, but low visibility and soft demand in marine sector ▪ Revenue of DKK 1.8bn and EBIT DKK 100-120m reiterated

08.05.2017 Schouw & Co. Q1 Interim Report 7

GPV 2017Q1

261 209 +25% 2017Q1 15.7% 2016Q1 17 16 +6%

EBIT DKKm Revenue DKKm ROIC ex gw % Financial Strategic Outlook ▪ Develops as expected with solid progress in revenue to DKK 261m ▪ EBIT at 2016 level; effect from Mexico startup and BHE acquisition ▪ Good activity and high order intake ▪ No material PPA effect in GPV in 2017 (and beyond) ▪ Ambitious growth agenda targeting DKK 1.5bn in revenue by 2020 ▪ Green field establishing in Mexico according to plan ▪ More capacity in Asia may be required to secure growth ▪ Acquisition of BHE; sales DKK 100m, EV DKK 42m, no EBIT in 2017 ▪ Potential to take over larger outsourcing cases from customers ▪ 2017 will be a year of consolidation and building platform ▪ Revenue a little less than DKK 1bn and EBIT DKK 50–60m ▪ Political uncertainty in US/Mexico can obviously impact

08.05.2017 Schouw & Co. Q1 Interim Report 8

Outlook

Borg Auto- motive Outlook Capital Markets Day ▪ Borg Automotive new leg from 2017Q2 ▪ Pre-PPA EBIT (9 month) DKK 110-130m ▪ Borg contributes with DKK ~800m in revenue ▪ Group revenue DKK 16.4m incl. Borg ▪ EBIT outlook maintained in all businesses ▪ Confirming that total EBIT likely will be in the upper end of the range ▪ 15 June (morning) in Copenhagen ▪ CEO’s of BioMar and GPV participating ▪ Details including venue to be confirmed

DKK million

2017

• utlook

2016 actual BioMar 510-550 581 Fibertex Personal Care 230-260 246 Fibertex Nonwovens 80-100 81 HydraSpecma 100-120 111 Borg Automotive 60-80

• GPV

50-60 44 Other

• c. -35
• 24

Total EBIT 1,065-1,135 1,038 Associates etc.

• c. 20

566 Financial items, net

• c. -40
• 27

Profit before tax 975-1,115 1,578 *1 *1

Notes: *1) Including DKK 24m from PPA effect in Specma; *2) GPV only recognised in 9 months of 2016; 3; After PPA of DKK ~50m in 2017 *4) Group expectations, the sum of the ranges is DKK 995-1,035m; *5) Associates in 2016 includes sale of shares in Kramp and SMB

*2 *5 *4 *3

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2017 Q1 interim report Schouw & Co. introduction Businesses in the portfolio

Agenda

Schouw & Co. at a glance

11 08.05.2017 Schouw & Co. Q1 Interim Report

HISTORY FINANCIALS FOOTPRINT

139

years of company history years in packaging

125

years as a conglomerate

29 14.4

billion DKK revenue (2016) million DKK EBIT (2016)

1,038

% ROIC

• ex. goodwill (2016)

20.2

~6,000

employees across the globe countries with production sites

23

major long-term shareholder

1

Our value proposition

12

1 2 3 4 6 5

Diversified portfolio Leading B2B businesses Long-term ownership ROIC focused Financially strong Active ownership We build a portfolio of leading Danish industrial businesses and develop them through value-creating, active and long-term

• wnership

MISSION

08.05.2017 Schouw & Co. Q1 Interim Report

We strive to be among the best in creating value in a proper and trustworthy manner

VISION

DIVERSIFIED PORTFOLIO ACTIVE AND DEVELOPING OWNERSHIP OPENNESS FINANCIAL VERSATILITY

STRATEGIC ELEMENTS

PR PROFI FITAB ABLE LE GROWTH WTH EF EFFI FICIEN CIENT T USE USE OF OF CAPIT PITAL FU FUTURE TURE-PR PROO OOFI FING NG

ACTIVE OWNERSHIP MODEL

Modus Operandi

GROWTH PROFIT RETURN GEARING PAYOUT PORTFOLIO Significant 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

10 years of solid development

16 16 14.4 11.6 9.8 8.2 07 15 13 12.5 14 9.5 11.8 12 11 11.9 10 12.6 09 8.4 +6.5% 08 16 20% +9.4pp 11 10% 09 07 14% 08 15 18% 13 16% 15% 14 17% 12 10 6% 8% 11% 831 708 685 772 646 369 190 124 439 16 1,038 07 09 08 15 10 14 13 +10.0% 12 11 16 12,489 08 2,000 2,375 5,094 07 09 9,131 6,812 13 +10.5% 14 15 12 3,188 3,511 2,173 10 5,313 11 16

• 0.7

15

• 4.2 times
• 0.4

14 0.0 13 10 12 4.0 2.9 0.0 1.7 08 09 2.6 3.9 07 3.5 11 4,108 16 15 2,139 13 14 +1.7% 2,382 2,052 12 11 3,287 08 3,541 3,166 10 09 3,743 3,334 07 2,873

ROIC ex goodwill Revenue (DKK bn) FTEs NIBD/EBITDA EBIT (DKK m) Market Cap (DKK m)

08.05.2017 Schouw & Co. Q1 Interim Report

Ownership

17

Givesco

Main shareholder for more than 40 years; controlled by the Eskildsen family

Hornsylds Legat

Trust whose sole purpose is to own shares in Schouw & Co.

Treasury shares

Shares owned by Schouw & Co.

Institutions and retail

Danish and international shareholders (about 50/50 split)

28% 15% 7% 50%

08.05.2017 Schouw & Co. Q1 Interim Report

Schouw & Co.’s role in the wind turbine industry

08.05.2017 Schouw & Co. Q1 Interim Report 18

1994 1996 1997 1999 2004 2013

DKK 40m invested in Micon

▪ Subsequent add-on investments ▪ 92% ownership by 1997

A merger creates NEG Micon

▪ All meetings at Schouw & Co. ▪ Schouw & Co. owns 46% of the listed company

Combining NEG Micon and Vestas

▪ Schouw & Co. plays a very active role

Nordtank Energy Group contacts Schouw & Co.

▪ Nordtank has 1.5 MW turbine ▪ Micon has 600 MW turbine ▪ A perfect match

Crisis!!!

▪ NEG Micon revenue DKK 4.7bn ▪ Equity lost, shares plunge ▪ Schouw & Co. appoints CEO ▪ Capital injection of DKK 250m

Sale of remaining shares

▪ Ownership gradually reduced ▪ Remaining 2% sold in 2013 ▪ Total return of DKK 1.8bn and IRR of 27%

1988 Schouw & Co. buys Grene 1990s Internationalisation 1995 Focus on industry

30 years of active ownership

2013 Merging Grene with Dutch peer Kramp 2016 Schouw & Co. sells the shares – very unlikely to obtain more than 20% ownership 2010 Hydra in China + India 2015 Acquisition of Specma 2016 Acquisition of Etola 2009 Demerger

• f Grene

and Hydra

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The transformation of Fibertex

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 Fibertex, then

partly owned by EAC, was seeking a long-term owner willing to invest in growth

 Schouw & Co.

acquires 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  Acquisitions in France, US, South 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 total  Technological upgrade in Denmark  Total investments DKK ~2bn  Strict focus on innovation  Establishing print business in Germany

2001 2002-2009 2010 2011-

Revenue

DKK 600m

Total revenue (2017)

DKK ~3.4bn

Exercising best ownership

08.05.2017 Schouw & Co. Q1 Interim Report 21

In Out

Borg acquired at DKK 1.15bn (EV/EBITDA 6.8x)

The acquisition of Borg Automotive is earnings enhancing and value creating and therefore very positive.

Carnegie (March 2017)

Kramp shares sold for DKK 1.0bn (EV/EBITDA 11.0x)

We like the prospects for continued growth in Borg’s revenue and earnings over the next years with Schouw paying an attractive 2017e EV/EBITDA

“ “ “ “

Handelsbanken (March 2017)

In our sum of the parts, we valued the stake at only DKK 690m, so this was a substantial surprise!

Fearnley Securities (Sep. 2016)

“ “

We argue that the divestment is a positive for shareholders, as we see significant upside to the transaction price versus our SOTP valuation

Nordea (Sep. 2016)

“ “

The strategic journey

22

2016 14.4 2015 12.5 +16 2014 2017 2006 11.6 7.4 2001 2013 2.2 11.7 1988 0.3

Diversification Bigger and stronger portfolio Bigger and stronger businesses Consolidating the conglomerate Revenue DKK billion

08.05.2017

Go Strong

Schouw & Co. Q1 Interim Report

Acquisitions Mergers Divestments

Borg

EV: 1,150m 85%

Kramp

EV: 6.500m 20%

Merger

Grene/Kramp

Merger

NEG/Vestas

M&A activity

23

Martin

EV: 500m 60+40% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Schulstad

EV: 2.700m 62%

Fibertex

EV: 660m 100%

Provimi

EV: 675m 100% (BioMar)

Tharreau

EV: 300m 100% (FIN)

Elopak

EV: 1.200m 50%

Sjøtroll

EV: 1.200m 51%

Hydro- power

Martin

EV: 900m 100%

Merger

Xergi BioMar

EV: 1.800m 68%+32%

Grene Industri- service

NWS

EV: 150m 100% (FIN)

Innowo

EV: 100m 85% (FPC)

Deal flow is not a target Best

• wnership

philosophy applied when divesting businesses

Fibertex South Africa

+48% (FIN)

Specma

EV: 650m 100%

GPV

EV: 400m 100%

08.05.2017 Schouw & Co. Q1 Interim Report

BHE

EV: 40m 100%

Diversified portfolio

INDUSTRY

B2B with preferences for pro- cessing industry & logistics

SIZE

Minimum revenue, or potential of, DKK 1bn

GEOGRAPHY

HQ in Denmark, but internationally focused

OWNERSHIP

Preferences for 100% (minimum majority share)

LEADING POSITION

Opportunity to set the agenda within niche segments

MANAGMENT

Strong and ambitious management

NEW OWNER NEED

Need for at new owner to support transformation

ACTIVE OWNERSHIP

Possibility to exercise active

• wnership

Investment criteria

Results are created by people

2017 Q1 interim report Schouw & Co. introduction Businesses in the portfolio

Agenda

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

27 08.05.2017 Schouw & Co. Q1 Interim Report

BioMar: World’s 3rd largest fish feed producer

28

~1 million tonnes DKK ~9.4bn DKK 510-550m around 900 1.9% CAGR 2012-2016 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 FTU

Feed Tial Unit

08.05.2017 Schouw & Co. Q1 Interim Report

BioMar: Strong position and growth outlook

VALUE PROPOSITION MARKET OVERVIEW 2016 FINANCIAL DEVELOPMENT COMPETITIVE ENVIRONMENT2

13 15 980 996 980 14 955

• 0.4%

12 16 966 9.0 8.5 15 13 +1.9% 14 8.2 12 8.7 16 8.9 447 12 438 14 434 394 15 13 +7.3% 16 581

Volume (kton) Revenue (DKKbn) EBIT (DKKm) Fish farmers Feed manufactures Raw 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 Rica China North Sea 20-25% Chile 25-30% ~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% of revenue <5%

• f 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 29 08.05.2017 Schouw & Co. Q1 Interim Report

BioMar: Huge ‘world’ outside salmon

AQUACULTURE FEED MARKET FORECAST STRATEGIC HEADLINES KEY SUCCESS FACTORS SALMON FARMIN IS VERY EFFECTIVE

+4.1% +8.2% 4.2 0.8 15 17 16 3.7 18 4.5 6.4 14 13 12 20 5.8 5.4 4.1 1.0 7.8 19 2.6 3.1 10 3.2 4.2 0.7 11 Tilapia Seabass/bream Other Shrimp 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

1.2 5-7 2 3

Feed Con- version Rate1 Edible yield2 Energy retention3 CO2 footprint4

70% 45% 50% 40% 5% 13% 10% 23% 27 12 7 12 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 30 08.05.2017 Schouw & Co. Q1 Interim Report

Fibertex Personal Care: Global spunbond manufacturer

31

~110,000 tonnes DKK ~2.0bn DKK 230-260m around 600 5.3% CAGR 2012-2016 Volume Sales EBIT Employees Growth ▪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 08.05.2017 Schouw & Co. Q1 Interim Report

Fibertex Personal Care: Strong growth in Asia

HIGH CUSTOMER CONCENTRATION1 SIGNIFICANT GROWTH IN NONWOVENS ASIA IS THE FASTEST GROWING REGION1 VALUE CHAIN PARTICIPANTS2

42% 18% 9% 12% 17% 16% Europe Asia Rest 58% Rest 29% Top 3 market participants in Asia and Europe

Notes: 1) Source: Euromonitor 2016, 2) Select market participants only

2015 3.8 4.6 6.3 2020 12.1 2010 1.3 2.0 1.6 3.4 9.0 2.4 +6.1% 2.5 +7.4% 5.8 Spunbond (hygiene) Other technologies Spunbond (non-hygiene) Global growth in nonwovens consumption Hygiene spunbond growth 2010-2015 4.0% 2015-2020 4.7% Main growth drivers

• Growing population
• Aging population
• Increasing income
• Technology development

46% Europe RoW Asia 20% 34% Baby Femcare Incontinence ~70% ~10% ~70% ~20%

~10% ~1%

21% 23% 56% 25% 44% 31%

~4% ~1% ~7% ~6% CAGR 2015-20

Spunbond hygiene categories Consumer Goods Manufactures Hygeine spunbond Machinery 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)

32 08.05.2017 Schouw & Co. Q1 Interim Report

Fibertex Nonwovens: Leading in industrial nonwovens

33

~55,000 tonnes DKK ~1.4bn DKK 80-100m around 1,100 9.6% CAGR 2012-2016 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 08.05.2017 Schouw & Co. Q1 Interim Report

Fibertex Nonwovens: Solid progress and traction

NEEDLEPUNCH TECHNOLOGY1 AUTOMOTIVE SEGMENT BUSINESS SEGMENTS TURNAROUND PLAN ONGOING

Roll goods Laminates/composites Sheets Needlepunch products 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 Advanced products 102 2020 3.2% 2012 79 2004 2015 2011 2014 2015 14 12 15 13 11 10 16 Revenue 15 14 11 13 10 12 16* EBIT Transformation by extending geographical footprint

* 2016Q2 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

34 08.05.2017 Schouw & Co. Q1 Interim Report

HydraSpecma: Leading Nordic hydraulic business

35

~4.5 million hoses DKK ~1.8bn DKK 100-120m around 1,100 34.9% CAGR 2012-2016 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 08.05.2017 Schouw & Co. Q1 Interim Report

Hydra/Specma: Combining two hydraulic businesses

HYDRA-GRENE PRIOR TO ACQUISITION CUSTOMER SEGMENTS ACQUISITION OF SPECMA PRODUCTS

▪ 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 Denmark Sweden Finland Other Wind Vehicles Material handling Nordic OEMs Global accounts + ~40%

• f sales

~60%

• f sales

Total sales of DKK ~1.8bn 36 08.05.2017 Schouw & Co. Q1 Interim Report

Borg: Europe’s largest auto remanufacturer

37

~2 million cores DKK ~1.0bn DKK 150-160m around 1,400 ~11% CAGR 2012-2016 Volume Sales1 EBIT 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

08.05.2017 Production Sales

Notes: 1) 2017 full-year comparable figures

Schouw & Co. Q1 Interim Report

Borg: European autoreman set to grow

38

REMANUFACTURING DRIVERS PRODUCTS EUROPEAN AUTO REMAN MARKET A STRONG VALUE-CREATING VISION

Forecast 8.0 2014 9.4 2016 8.7 2015 2020 11.6 10.8 2018 ~7% 2019 ~8% 10.1 2017 7.4 2012 6.5 2013 7.0 EUR billion Growing carpark & new sales 2.3% 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 reman. capabilities Drives industry promo- tion/knowledge sharing Global green agenda Supply 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. Mission: We start the cars and keep them running

08.05.2017 Schouw & Co. Q1 Interim Report

GPV: International electronics and mechanics

39

~10 million finished goods DKK ~1.0bn DKK 50-60m 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

• utsourcing 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

08.05.2017 Schouw & Co. Q1 Interim Report

GPV: Increased use of electronics drives growth

40

GROWTH AGENDA EMS LIFE CYCLE INDUSTRY AND CUSTOMERS SELECTED MARKET PARTICIPANTS

Larger

• utsourcing

cases GPV 2020 +1.500 Establishing in Americas Organic Growth GPV 2015 Active M&A agenda 850 Customers EMS businesses Input 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 international B2B companies

• ABB
• Grundfos
• Spectris
• Etc.

Production preparation Prototype and testing Design and specification Concept Product idea Phase out Legacy Serial production Production 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 08.05.2017 Schouw & Co. Q1 Interim Report

Fish feed Hygiene nonwovens Industrial nonwovens Hydraulics EMS Auto reman

Strong position in global growth industries

41 Source: Schouw & Co. estimates from various sources

24 20 2015 ~4% 2020 7 4 ~9% 2020 2015 3 2 ~8% 2020 2015 71 53 ~6% 2015 2020 331 446 ~6% 2020 2015

Global GDP growth (2015-20) ~3.5%

Volume (m tonnes) Value (USD bn) Volume (m tonnes) Volume (m tonnes) Value (USD bn)

08.05.2017

12 8 2015 2020 ~8%

Value (EUR bn)

Schouw & Co. Q1 Interim Report

Contact

Investor Relations CEO/President Kasper Okkels Jens Bjerg Sørensen ir.@.schouw.dk +45 86 11 22 22