Schouw & Co. Capital Markets Day Langelinie Pavillonen, 15 June - - PowerPoint PPT Presentation

Schouw & Co. Capital Markets Day

Langelinie Pavillonen, 15 June 2017

Agenda Speakers

Jens Bjerg Sørensen President Schouw & Co.

▪ The strategic mindset in Schouw & Co. ▪ Insights from the acquisition of Borg Automotive ▪ General status and update on recent developments

Carlos Diaz CEO BioMar

▪ Highlights from BioMar’s strategy ▪ Market insights and business update ▪ Entrance into shrimp feed with Alimentsa acquisition

Bo Lybæk CEO GPV

▪ Status after the first year of Schouw & Co. ownership ▪ Establishment in Mexico ▪ Growth agenda, including recent BHE acquisition

09:00 09:45 11:15

12:00

Lunch

Borg Automotive Schouw & Co. strategic mindset General update

Agenda

25 25

countries with production

6,5 ,500

employees

2

major long-term shareholders

Our value proposition

1 2 3 4 6 5

Diversified portfolio Leading B2B businesses Europe based, global outlook ROIC focused Financially strong Active/long-term ownership

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

VISION

Our modus operandi is active ownership

DIVERSIFIED PORTFOLIO ACTIVE AND DEVELOPING OWNERSHIP OPENNESS FINANCIAL VERSATILITY PROFITABLE GROWTH EFFICIENT USE OF CAPITAL FUTURE- PROOFING

STRATEGY WHEEL ACTIVE OWNERSHIP MODEL

Active ownership: the transformation of Fibertex

 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  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 in total  Technological upgrade in Denmark  Total investments DKK ~2bn  Strict focus on innovation  Establish print business in Germany

2001 2002-2009 2010 2011-

Revenue

DKK 600m

Total revenue (2017)

DKK ~3.4bn

CAGR 11%

HydraSpecma update

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 presence ▪ Ambition of reaching DKK 1bn in revenue

M&A required

▪ Highly complementing customer segments ▪ Broad geographical presence ▪ Exposure to many industrial segments ▪ Strong platform for future growth ▪ Economies of scale ▪ Synergies primarily within sourcing and cross-selling

• pportunities

Specma acquired early 2016 Strategic rationale ▪ A leading Nordic hydraulics and fluid conveyance application provider ▪ Revenue of DKK +1bn, significantly bigger than the ‘old’ Hydra ▪ Unique match between products, competences and knowhow ▪ Acquired at 8.2x EBITDA before synergies

Hydra-Grene before acquiring Specma

Status 17 months after the transaction ▪ In general, everything has developed as expected ▪ Soft demands in some areas, especially marine and mining ▪ Solid progress in Specma’s transformation and relocation ▪ Harvesting of sourcing synergies is encouraging ▪ Cross sales and more ‘traditional’ integration up next ▪ New (Danish) CEO in Specma from 2018

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

The strategic journey of Schouw & Co.

Diversification Bigger and stronger portfolio Bigger and stronger businesses Consolidating the conglomerate Go Strong

Revenue

2.2bn

Revenue

7.4bn

Revenue

11.7bn

Revenue

14.4bn

Target rev.

+20bn

1988 2001 2006 2013 2016 2020 x65 Revenue

0.3bn

2020 Strategic ambition

GO strong

Revenue DKK +20bn EBIT DKK 1.xbn ROIC >15%

Scenario

January 2017 revised

2020 ambition

Make required CAPEX investments (for organic growth) DKK 2-3bn Complete x M&A bolt-on acquisitions DKK x bn Expand the portfolio with one new business DKK 1.0-1.5bn

Investments

✓ (✓)

M&A CAPEX Operational excellence Digitalisation Fit for future Innovation

SCHOUW’S CITY OF STRATEGY

Schouw & Co. strategic mindset Borg Automotive General update

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 Ownership since 2006 Ownership since 2001 Ownership since 2001 Ownership since 1988/2016 Ownership since 2016

Ownership since 2017

Borg Automotive, a leading remanufacturing company

▪ Borg Automotive is a remanufacturing company founded in 1979 by Søren Toft-Jensen ▪ The company specialises in the production and sales of remanufactured parts for the automotive industry like alternators, starters, brake calipers ▪ Borg is Europe's leading independent auto remanufacturer with broadest product range and sales in almost all European countries ▪ Customers (+100) are wholesalers, distributors and OES/OEMs; largest ~10% of sales ▪ Headquarter in Silkeborg with production sites in Poland and UK, and a R&D facility in Belgium ▪ Production volume ~2m cores ▪ FTEs: ~1,400 ▪ Annual sales: DKK ~1bn with EBIT DKK 150-160m ▪ CAGR 2012-2016 ~11%

Product split and life cycle Borg Automotive at a glance

• engines. At least 15

Remanufacturing in Europe to grow ~8%

Growing carpark & new sales 2.3% annual car park growth towards 2020 Longer vehicle lifetime +1 year in average life- time since 2010 Declining num- ber 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

EUR billion Forecast 10.8 2018 2014 8.7 7.4 2013 2015 2016 8.0 9.4 10.1 2017 2020 11.6 2019 ~7% ~8% 6.5 7.0 2012

European remanufacturing drivers European auto remanufacturing market

The remanufacturing process

The remanufacturing process

Acquisition makes good business sense

Rationale, conglomerate level

▪ Current capital structure provides room for significant investment on top of current investment programs ▪ Span of control target of 5-7 businesses enables new value enhancing platform investments ▪ Continue value-creation of the conglomerate by pursuing attractive buy-and-build opportunities ▪ A new platform investment is key in ‘the next step’ of Schouw & Co.

Rationale, business level

▪ Borg Automotive fulfils all investment criteria

▪ Leading position – leading position in Europe ▪ B2B – processing of remanufacturing auto parts servicing global wholesalers, buying groups and OES/OEMs ▪ Internationally focused – sales throughout Europe with production in Poland and UK ▪ Strong management – highly skilled management team willing to step-change the company ▪ Active ownership – significant opportunity for transformation through active ownership

▪ Borg Automotive is well-run and among the best-in-class to deliver growth and profitability ▪ Well positioned with solid presence in attractive markets and all major product categories ▪ Industry growth of ~8% is unique ▪ Significant opportunities to drive further growth in a fragmented industry, organically and through M&A

Schouw & Co. strategic mindset Borg Automotive General update

Agenda

• 0.7x

’16 NIBD/EBITDA

DKK -2.8bn

’11-16 ∆NIBD

Delivering on our strategic goals

GROWTH PROFIT RETURN GEARING DIVIDENDS PORTFOLIO

Considerable growth every year Benchmark level profitability ROIC > 15%

(dependent on risk)

Investment grade capital structure Constant or increasing dividends 5-7 strong businesses

+14%

‘15-16 rev. growth

+8%

‘11-16 rev. CAGR

+25%

‘15-16 EBIT growth

+13%

‘11-16 EBIT CAGR

20.2%

2016 ROIC ex gw

+6.4pp

‘11-16 ∆ROIC ex gw

6

businesses

active

M&A agenda

DKK 12

’16 dividend/share

+200%

’11-16 ∆dividend

Outlook

Borg Auto- motive Ali- mentsa Outlook ▪ 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 ▪ Total EBIT will likely be in the upper half of the range DKK 995-1,135m ▪ Recent acquisition of Ecuadorian Shrimp feed producer not yet included in guidance ▪ Transaction subject to approvals and expected to close in ‘autumn’ of 2017 ▪ Likely limited effect on 2017 figures

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

*2 *5 *4 *3

Fish feed Hygiene spunbond Industrial nonwovens Hydraulics EMS Auto rema- nufacturing

Strong position in global growth industries

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%

44 32 2020 2015 ~7%

BioMar

6%

Fibertex Personal Care

12%

Fibertex Nonwovens

9%

HydraSpecma

10%

GPV

7%

Borg Automotive

+10%

Sustainable long-term EBIT targets

Return on Invested Capital 15%

Strategic opportunities

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

Hygiene awareness in Asia’s growing middle class

Agenda Speakers

Jens Bjerg Sørensen President Schouw & Co.

▪ The strategic mindset in Schouw & Co. ▪ Insights from the acquisition of Borg Automotive ▪ General status and update on recent developments

Carlos Diaz CEO BioMar

▪ Highlights from BioMar’s strategy ▪ Market insights and business update ▪ Entrance into shrimp feed with Alimentsa acquisition

Bo Lybæk CEO GPV

▪ Status after the first year of Schouw & Co. ownership ▪ Establishment in Mexico ▪ Growth agenda, including recent BHE acquisition

09:00 09:45 11:15

12:00

Lunch

BioMar company presentation

BioMar is the 3rd largest quality aquaculture feed supplier with a commitment to develop the industry sustainably and responsibly

WHAT WHERE HOW WHY

• 3rd largest supplier of

quality fish and shrimp feed globally

• Supplies to more than 45

different fish and shrimp species

• Main focus is to support

customers in providing healthy and tasty seafood

• Founded in 1962 by

Danish fish farmers

#3 globally

• Global production

footprint with 14(16) state-of-the-art factories

• Local production in all

seafood “powerhouses” (Norway, Chile, UK, China)

• Sales generated in all

major seafood regions (Europe, LatAm and Asia)

• Strong heritage with a

long-term commitment to develop the industry sustainably/responsibly

• Cutting-edge knowledge

and long lasting partner- ships with stakeholders

• 4 R&D/test centres

focusing on best-in-class feed solutions

• 100% commitment to

the purpose: “We are innovators dedicated to an efficient and sustain- nable global aquaculture”

• Well-documented and

communicated through-

• ut the organisation and

to key stakeholders

The BioMar Group financials for Q1 show a good start for 2017

Revenue (DKK)

1.9bn

Return on invested capital

30.8%

• Incl. goodwill

T

• nnage

221TT

EBIT (DKK)

53m

General

NetWorking Capital (DKK)

698m

Despite flat volume and revenue development, BioMar has grown EBIT significantly since 2013 (DKK +170m)

Volumes

ktons

Revenue

DKKm

EBIT

DKKm & % F2017 +9,400 2016 8,867 +1.9% 2015 8,974 2014 8,702 2013 8,451

966 955 996 980

2016 2013 F2017 2015 2014

581 447 434 394

2015 ~5.6% 5.3% 2014 510-550 +1.5% F2017 2016 6.7% 4.9% 5.5% 2013

The positive development in EBIT over the last few years is founded in many different aspects and improvements are still targeted, examples being:

• The strengthening of R&D
• leading to further focus on functional feeds
• continuously recipe optimisation based on

increased depth and breadth of RM knowledge

• Optimisations within inbound & outbound

logistics

• Continuous focus on every day optimisations
• Increased silo capacity
• Optimisation of fleet for feed deliveries with a

new super modern ship powered by liquefied gas already in operations and another being prepared for September 2017

• Expansion of Myre feed production capacity

already in place while a Line 3 in Karmöy is in the last phases of execution. Securing economies of scale.

Cobia

BioMar is structured around three commercial divisions, each with individual species and geographical focus

Group CEO Carlos Diaz Salmon Jan Sverre Røsstad EMEA Ole Christensen Emerging Markets Henrik Aarestrup

Atlantic Salmon

~640 ~240 ~200 ~1100

Group CFO Claus Eskildsen Coho Rainbow Trout

FTEs

Eel Sea Bass Sea bream Tilapia Shrimp Sturgeon T

• tal of 45 species

Japanese Sea Bass Rainbow Trout Turbot

BioMar has 14 (16) production facilities spread around the world with a total seasonal capacity of 1.6 (1.8) mtons fish feed

2x 2x 3x

Production sites

Chile ~360,000 T Costa Rica ~40,000 T Norway ~620,000 T Denmark ~120,000 T Turkey ~55,000 T Greece ~60,000 T Spain

France ~45,000 T Scotland ~120,000 T China ~170,000 T

14(16) sites

~1.6 (1.8) mtons capacity

Australia

Ecuador

(under approval)

Aquaculture value chain

BioMar is a focused aquaculture feed supplier with strong capabilities in food safety, sustainable sourcing and cooperation

Raw material Feed production Transportation Farming & harvesting Processing Retail logistics

BIOMAR’S PLACE BIOMAR’S RESPONSIBILITY Transforming sustainable raw materials of marine- or land-based origin into high quality fresh or processed fish products for consumers worldwide

Sustainability Concept and Framework - www.biosustain.world

T

• day more sophisticated tools: BioMar Omega T

echnology and Eco Efficiency tool –The next step

The global fish feed industry is expected to grow ~4.5% – driven by larger populations, sustainability concern and health aspiration

Global fish feed industry (mtons)

2016 2017 2018 2019 2020 20.6 21.6 22.5 23.5 24.4

CAGR ~4.5% DRIVERS

 Population growth  Sustainability concern  Health aspiration

Slowdown expected in global feed market across all species – further industry consolidation is a likely scenario

Forecast Historic

~4.5%

+7.3%

• Mature market with strict

• Growth primarily driven by

• Relatively strong demand

• Relatively strong demand

• Rising export of fish to

Global aquaculture feed market by species

(2010-2020F, mn tonnes)

BioMar did until recently not address the largest profit pools, which are found in Asia & Americas due to high volumes and margins

170 160 280 970 220

820 190 1 290

530 740 280

Profit pools in feed by species and geography

(Rough estimations, EBIT mDKK, EBIT margin)

North Sea Americas Continental Europe China Asia (ex. China) Africa

5% 9% 4%

BioMar’s current core Markets not addressed by BioMar until recent entrance in Shrimp

BioMar is “Shaping the future” with new strategy Strengthen the core Broaden the reach Shaping the future

2016 2018 Volumes (ktons)

Value creation Time 2020

BioMar wants to be the leading, agile and focused aquaculture feed supplier

• continue

Høydal is the symbol of our strategy, fast, agile, sustainable and requires a competent crew

Invest & adapt production & logistic setup Consolidate position in core markets Organise group for next phase of growth Preparing the company for 2025 looking at adjacent

• ptions to fish feed

Commercial excellence Operating model Operating excellence Performance excellence

BioMar wants to be the leading, agile and focused aquaculture feed supplier

We are innovators dedicated to an efficient and sustainable global aquaculture Volume 1,500kton EBIT(%) 6%

Strategic ambition 2020

STRATEGIC ENABLERS

Continue to evaluate our com- panies & markets Extend product portfolio to new markets Enter new markets and species

Active M&A agenda STRATEGIC GOALS

BioMar wants to be the leading, agile and focused aquaculture feed supplier

AGILITY EXCELLENCE GROWTH

Shaping the future Values

INNOVATION COOPERA- TION SUSTAIN- ABILITY PERFORMANCE

COURAGE INNOVATION RESPECT OPENNESS EXECUTION

Guiding principles

The strategy anchored in 4 guiding principles: innova- tion, cooperation, sustainability and performance

Our innovative mindset combined with a strong R&D platform enables us to grow long-term and in an efficient way

GUIDING PRINCIPLES Innovation

WE ARE INNOVATORS DEDICATED TO AN EFFICIENT AND SUSTAINABLE GLOBAL AQUACULTURE

Innovation examples

1 global center of excellence 2 + 1 Feed trial and test production units 10-15% R&D spend (of EBIT) 41 FTEs dedicated to R&D Innovative engaging with customers, NGOs,

and industry organisation to spot innovation opportunities

Probiotics in fish feed Cargo ship powered by liquefied gas New generation

• f ORBIT

feed in RAS “In the Blue” concept

We cooperate with key stakeholders to build long-term partner- ships across the value chain

GUIDING PRINCIPLES Cooperation

WE ARE DETERMINED TO EMBRACE LONG-TERM COMMITMENTS TOWARD AND WITH STAKEHOLDERS

Raw material consumption

3 category sourcing teams (marine species,

non-marine nutrients and additives & packaging)

Strategic sourcing with key suppliers Partnerships on joint factory projects in Chile,

Costa Rica ,Turkey and China

Product development with farmers

to develop healthy and sustainable seafood

Sustainability execution

Comprehensive sustainability report

covering various KPIs and follow-up measures to improve sustainability in the aquaculture value chain

BioSustain program helping fish farmers to

increase sustainability focus at retail level

Global sustainability portal to better

communicate with stakeholder regarding sustainability

Our cornerstone is sustainability – we will lead the work to promote new and more sustainable ways of doing business

GUIDING PRINCIPLES Sustainability

WE ARE DEVOTED TO DEVELOPING SUSTAINABLE AQUACULTURE

25% reduction

• f CO2

emissions 60% reduction

• f scarce

RM +80% use

• f sustain-

nable RM 100% tracea- bility

Performance measures

We value performance highly to enable our customers to prosper and produce healthy seafood to feed the world

GUIDING PRINCIPLES Performance

WE ARE COMMITTED TO ENABLING THE AQUACULTURE INDUSTRY TO BE A LONG-TERM PROFITABLE PROVIDER OF SAFE, HEALTHY SEAFOOD Step up on the HR agenda to strengthen

the capabilities among our employees and secure a more customer oriented organisation

Stringent supervision systems to ensure

quality, food safety and 100% traceability

Continue to develop and improve our

product programme and services delivering the best performance at a competitive price

Securing the best TEP* for all our customers

in all our markets

100% tracea- bility Ambitious employee development targets established in 2015 Focusing

• n

TEP*

T

• achieve our vision of becoming a leading, agile and focused

aquaculture feed supplier, we will have full focus on three key areas

GLOBAL EXCELLENCE

• Innovation across

all parts of the value chain

• Key player in development of

sustainable aquaculture

• Focus on core species
• Functional excellence catalyzed by

strong processes and high-performing talents

SUSTAINABLE GROWTH

• Important player with critical

mass in all main markets

• Inorganic growth to consolidate

industry role

• 50% growth in tonnage sold
• +50% of functional feeds
• 6% EBIT and 15% ROIC

LOCAL AGILITY

• Focused aquaculture feed supplier
• Flexible and effective production to set-up to

meet customer requirements

• Strategic partnerships
• Pro-activeness in the market jointly

driving value for customers AGILITY EXCELLENCE GROWTH Shaping the future

Strategic logic in entering shrimp feed

Global aquaculture feed markets m ton Latin American shrimp feed markets

Ecuador ~650k t

Current core

Ecuador is the most attractive shrimp feed market in Latin America ▪ Biggest size ▪ Highest growth ▪ Most profitable

Salmonids, bass, bream Shrimp 4.5-5.0 ~4.9 Other ~12

• Cont. Europe

Growth +3% Growth +5% Growth 4-5% EBIT 5-6% EBIT >5% EBIT <5%

Ecuadorian shrimp farming is very attractive and has been profitable historically

▪ With about 450k t shrimp produced in 2016, Ecuador is among the global T

• p 5 shrimp producing countries

▪ About 95% of production is white-leg shrimp (Vannamei) ▪ Ecuadorian shrimp are positioned as high-end products ▪ The majority of the production is exported (US, EU, Asia) ▪ Ecuador has optimal biological conditions for shrimp farming with up to three production cycles per year ▪ Farming densities in Ecuador are low compared to e.g. Asian shrimp farming ▪ Significant potential for growth in Ecuadorian shrimp industry; 8-12% annual growth expected in the coming years ▪ The feed industry is led by four major players representing about 75%

• f the market

▪ Both the farming industry and the feed industry have historically been profitable

Shrimp industry in Ecuador Shrimp farming areas in Ecuador

About 2/3 of Ecuador's shrimp production is located in the Guayas region Alimentsa location

Acquisition of Alimentsa

▪ Ecuadorian top 4 feed producer ▪ Market share 10-15% ▪ Founded 1986 by Danish/German families ▪ Founders are still main shareholders ▪ Capacity of ~110k t pelletised shrimp feed ▪ Complete line of feed products; Strong technical setup; 3 training centres ▪ Strong management with solid track-record continues under BioMar’s ownership ▪ 2016 revenue USD 75m and solid profitability ▪ 145 employees

Alimentsa at-a-glance

▪ Acquisition of 70% of the company ▪ Valuation (EV 100%) USD 170m ▪ EV/EBITDA17E transaction multiple of ~9.4x ▪ Subject to customary approvals ▪ Closing expected autumn 2017 i.e. limited effect on financials in 2017 (except payment of USD 119m) ▪ Likely 2018 effect before minorities and PPA: Volume ~85k t, revenue DKK +500m, EBIT DKK +110m

Transaction details

▪ Leverage from BioMar’s knowledge/setup in salmonids ▪ Development/introduction of functional shrimp feed; e.g. performance, efficiency, health benefits, sustainability, food safety, traceability and other concepts ▪ Optimise sourcing platform and raw material usage ▪ Cross-utilise with shrimp feed production in Costa Rica

Long-term synergies

Karmøy expansion is on track and will be included in the production planning on 15 June (today) and several major logistic projects are underway too

• A 140.000 t/y Line 3 in Karmøy being build
• Start up by 15. of June (Today)
• Warehouse capacity in Myre being expanded
• Operational in August 2017
• A second gas-driven feed ship in being build
• Ready for High season mid September
• Total Investment cost around 575 Mill. NOK

Our JV BioMarSagun in Turkey is beginning to compare to

• ther BioMar operations in regards to performance

• A fish feed plant in the Aydin region positioned close

to the very important farming area for Sea Bass and Seabream in Aegean Sea

• Total investment in the factory is around 12 mill. €

and the production capacity is 50.000 tons/year

• Commercial production was initiated October 2016
• Factory performing at the level of other BioMar

factories

• BioMar-Sagun has gained a strong position in the trout

segment and we are fighting getting a bigger share of the feed market for Sea Bass and Sea Bream

• We aim for a continued growth of our market share

in Turkey in order to be utilising our full production capacity in year 2020.

• The Market size in Turkey is around 400.000 T of fish

feed including captive volumes (~30% non captive)

Our JV in China is off to a good start based on the recently purchased factory in Haiwei and the toll milling in Chengdu, while construction in Wuxi is ongoing

Wuxi

• Planned start December 2017
• Will be able to supply feed at Western quality

standard to both cold water and warm water species

• Civil works 3 months from completion

Haiwei

• Acquired November 2016
• Price leader on feed to high value fish species
• 120 employees
• 3 production lines

• Prod. Capacity:

The Australasian market has grown into a sizeable volume and is continuing to show good growth – BioMar is starting to build a factory in Australia now

• A 110.000 t/y greenfield feed factory
• Investment cost of around 300 mill. DKK
• Start up end of 2019

The rationale for such an investment is:

• The market consists of only high value species

with Salmonids accounting for 90% but now also with other species like Shrimp, Kingfish, Barramundi and Tuna showing greater potential.

• There is a high focus on product quality, food

safety and sustainability.

• The market has a very good fit to BioMar with

regards to culture and language

• Currently there are only two domestic feed suppliers – Skretting and Ridley – with the latter losing ground based
• n poor performance

Let’s Innovate Aquaculture

Questions?

Agenda Speakers

Jens Bjerg Sørensen President Schouw & Co.

▪ The strategic mindset in Schouw & Co. ▪ Insights from the acquisition of Borg Automotive ▪ General status and update on recent developments

Carlos Diaz CEO BioMar

▪ Highlights from BioMar’s strategy ▪ Market insights and business update ▪ Entrance into shrimp feed with Alimentsa acquisition

Bo Lybæk CEO GPV

▪ Status after the first year of Schouw & Co. ownership ▪ Establishment in Mexico ▪ Growth agenda, including recent BHE acquisition

09:00 09:45 11:15

12:00

Lunch

Accomplish More

• Focus. Prioritising. Execution.

Schouw & Co. Capital Market Day – June 15, 2017

Summary

• International CEO with 20+ years’ international experience
• Work experience through eight years of employment and residence in Switzerland

Experience

• GPV International, CEO (current)
• Non-executive board positions (current)
• Norsk Hydro Danmark, CEO (2002-2007)
• Hydro Aluminium Tønder (DK) and Raeren (B), CEO (1999-2007)
• LR Plast, CEO (1996-1999)

Education

• MBA KMU HSG – MBA for SMEs (University St. Gallen, CH)
• MSc Mechanical Engineering (Aalborg University, DK)

Curriculum Vitae

From a successful turnaround to an active growth agenda Execution has started

• 11 factories in total (Norway,

• 22 legal entities
• Strategic decisions leading to significant

• Large projects in the defence industry
• PCB board manufacturing
• Mobile dental equipment
• GPV has a focused business strategy:
• Three legal entities
• Project business discontinued
• Operations divested, discontinued

• LCC manufacturing capabilities up-

• Profitability restored and clear growth

• Continued focus on Core and

• Execution on growth plan
• Increasing share of wallet with

• Attracting new customers
• Active M&A – consolidation and

• Internationalisation of organisation

• Stable. Specialized. Global.

EUR 118 million USD 127 million

2016 revenue DKK 880 million

Across factories in Asia, Europe and the Americas

1,150 dedicated employees

High-mix / low-medium volumes We combine Electronics and Mechanics to Mechatronics products In-house Mechanics capabilities

Leading EMS- partner in Denmark

Key figures on calendar years

Book to Bill YTM March 2017

• Our order bookings are widely founded by many

customers supporting our guideline for FY 2017

• We have seen a good order intake YTD supporting

the upper guidance level

• What we are following closely:
• Challenges with sufficient supply of some

electronics components (first signs of an allocation situation)

• Potential “ketchup effect” in the order intake i.e.

have the customers ordered more than they are actually going to sell

Product examples

• Vibration meters for

• Pump control units
• Control units for cement plants
• Hydraulic control units
• LAN-XI modules
• Naval radars
• Black boxes for ships
• Ruggedized LED displays
• Control units
• Patient monitoring

New factory in Guadalajara, Mexico

2016 in flash First year of Schouw & Co. ownership

Cross

• rganisational

lean facilitation training Talent factory initiative launched New technology, automation and capacity # countries delivered to 34 # deliveries to customers 48,000 # work

• rders

manufactured 53,000 # different products delivered 4,500 # products delivered to customers 8,200,000

Three time zones Global service Local foundation

GPV is a global EMS partner, serving customers in the three main time zones. With manufacturing facilities in Thailand, Denmark and Mexico we realize our customers' needs across continents.

The Americas Europe Asia

GPV Brand Movie

GPV Electronics Thailand

GPV Electronics Denmark

GPV Electronics Mexico

GPV Mechanics Denmark

GPV Mechanics Thailand

HOUSE OF STRATEGY 2020

GPV

Strategic goals

Win larger customer cases Capture new US business for MX Secure strong market platform in US and in CEE

Strategic enablers

One Company Facts and performance Responsibility Proactivity Winning spirit Accomplish and Innovate More with

• ur Customers

Fit Mexico set-up Operational excellence Digitalisation Active M&A agenda GPV enables you and your business to accomplish more through uncompromising focus on quality, on-time delivery and fast response within high-mix / low-medium volume Organisation Profitable growth Secure recurring business Accomplish More GPV want to be the most value-adding EMS-Partner worldwide

The success of GPV is based on three main areas

• Well-balanced split between Denmark and Thailand / Mexico
• State-of-the-art production equipment with high efficiency

• High quality EMS with in-house mechanics competencies
• Advanced logistics setup – global deliveries

Efficient and cost competitive

• perations
• Weekly review of current month plus two months
• Focus on customers profitability and factory efficiency
• Common ERP/BI & business system across all entities
• Framework agreement with key accounts – controlled

Visibility in the business

• Targeting specific customers with high quality requirements
• Understand the customers’ needs in each industry segment
• Involvement in the product design and test strategy
• Close, long-term relationships with customers

Balanced customer portfolio

• Order intake
• Revenue
• Gross margin
• Service

Customers Operational setup Controlling

During 2016 we have converted good cases into our books

… and we still have a good sales pipeline with a significant potential (not weighted)

2019

2018

2017

GPV’s customers expect to outsource more to GPV

• In average GPV has a 48% “Share of Wallet”

• Customers have become more differentiated

• The top areas where customers believe GPV

• EMS and Box-build incl. Mechanics
• Logistics handling and Test development
• Number of ambassadors (customers who are

QUALITY “GPV has high quality services” ON-TIME DELIVERY “The services are always delivered at the agreed time” FAST RESPONSE “The reaction upon unsatisfactory deliveries is prompt and professional”

Customer surveys

• Quality. On-time delivery. Fast response.

a b c a b c

New production site in Mexico

Establishment in Mexico support growth strategy

• Agreement on new product line

• Outsourcing of UK based

• Outsourcing of US based

• M&A in US to get access to

• Accelerate utilisation of Mexico

• Hourly wage for standardised

• Mexico: 10-20% of DK
• Skilled labour for maintenance,

• Mexico: 30-50% of DK
• Mid-level managers in

• Mexico: 60-80% of DK
• Geographical and cultural

• Logistics function to reach the US

• Short production lead time (24/7)
• Building on:
• The learnings from LCC
• peration in Asia
• GPV Business System
• GPV way of doing business

Mexico factory in operation

Organisation

• Phase One of the ramp-up with key functions in place
• Initial training of WC and BC (in TH and DK) concluded
• GPV Business System, ERP etc. implemented

Sales

• Agreement on four larger customer cases with three

customers

• Implementation of first three cases ongoing
• Implementation of the fourth case will start in Q3-2017
• Mature pipeline primarily based on existing corporations

Operations

• Key processes in place and validated – ISO 9001 certificate

in April 2017

• First deliveries took place as planned

A successful acquisition will move the business case to the next level in 2020

Our growth agenda Three pillars are identified to grow 2020 revenue above DKK 1.5bn

The M&A growth pillar can be unfolded into four M&A

• pportunities with different impact, potential and complexity

Small Scandinavian bolt-on Obtain footprint in DACH / CEE

Strategic acquisition in US Drive consolidation in core market A B C D

M&A opportunity Main ambition Assessment

BUILD SCALE IN EXISTING GPV SITES CONSOLIDATE CORE MARKETS AND BUILD SCALE IN EXISTING GPV SITES STRATEGIC MARKET POSITIONING IN GERMAN SPEAKING EUROPE AND PRODUCTION IN LC CEE INCREASE CUSTOMER BASE AND BUILD SCALE IN EXISTING MX SITE

Acquisition of BHE – a Top 5 EMS in DK

Strengthen our DK and D market position Support our 2020 growth plan A cornerstone in our 2020 business plan with a strong emphasis on realizing growth potential.

• The cornerstone in the BC is the synergies

• The integration into our current platform

will further improve capacity utilisation in DK and TH

• The new revenue is split 60:40 between

• DK will grow approx. 50% giving a

• BHE is in Top 5 EMS in DK
• Seven to ten customers with good

• Very little overlap with GPV in customer

• BHE have two to four interesting

• Two larger customers with good growth

Market position. Capacity utilisation. Cost synergies.

Significant annual cost synergies Equal to one-off integration costs

• Total savings on WC salary includes retention of three

persons in Sales (market investment)

• Savings on rental and capacity costs as a result of

closing the factory in DK and closing the legal entity (BHE A/S)

• We expect a minor saving on direct costs in DK
• In-sourcing of the production from CHN to TH will move

the gross profit from the present EMS partner to GPV

• Non-recurring sales: Estimated risk related to retaining all

sales

• Expects positive sales synergies after the integration

phase

• f small local EMS in

The Top 50 European EMS market is relatively fragmented. Several M&A opportunities

Thank you for your attention!

Agenda Speakers

Jens Bjerg Sørensen President Schouw & Co.

▪ The strategic mindset in Schouw & Co. ▪ Insights from the acquisition of Borg Automotive ▪ General status and update on recent developments

Carlos Diaz CEO BioMar

▪ Highlights from BioMar’s strategy ▪ Market insights and business update ▪ Entrance into shrimp feed with Alimentsa acquisition

Bo Lybæk CEO GPV

▪ Status after the first year of Schouw & Co. ownership ▪ Establishment in Mexico ▪ Growth agenda, including recent BHE acquisition

09:00 09:45 11:15

12:00

Lunch