Schouw & Co. Full Year 2016Investor presentation

MARCH 2017CEO JENS BJERG SØRENSEN | IR KASPER OKKELS

2016 highlights04.03.20162016 Annual Report 2

Revenue DKK

14.4bnGrowth 14.4% // 2015: 12.6bnIncrease mainly due to acquisitions

EBIT DKK

1,038mGrowth 24.9% // 2015: 831mDKK ~50m from non-recurring items

Cash flow from operations DKK

1,598mGrowth 36% // 2015: 1,171mFree cash flow 1,203m

NIBD/EBITDA

-0.7xNIBD increase: Specma, GPV, dividends, capexNIBD reduction: cash flow, Kramp divestment

Long-term value creation

investingAcquisitions; Specma, GPV, Etola, BHE (2017)Capex; capacity in Malaysia, Norway, the Czech, etc.

Return on invested capital

20.2%ROIC incl. goodwill 16.6%Growth in ROIC seven years in a row

Another strong year in 2016Revenue DKKbn ROIC (excl. GW) %

EBITDKKm Cash flow from operations DKKm

10.03.20162016 Annual Report 3

2016

9.9

2013

11.8

2015

11.712.6

14.4

2012

11.3

20142011

+14%

831708685679

557

+25%

1,038

20152014 201620132011 2012

18.3%20.2%

20152012 20142011

+1.9pp

15.2%16.9%

2016

13.8%

2013

16.1%

1.598

1.171

628667771

375

2016

+36%

20152013 201420122011

-0.7x’16 NIBD/EBITDA

DKK -2.8bn’11-16 ∆NIBD

Delivering on our strategic goals10.03.20162016 Annual Report 4

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

5businesses

activeM&A agenda

DKK 12’16 dividend/share

+200%’11-16 ∆dividend

NIBD reduction despite significant investments10.03.20162016 Annual Report 5

2016 Net Interest-Bearing Debt DKKbn Major investments1

Hydra acquires Specma to become a leading hydraulic company in the Nordics

DKK

650m

DKK

400m

Schouw & Co. acquires GPV, a strong EMS player in Northern Europe

DKK

400m

FPC adds another production line in Malaysia to cater the growing hygiene market in Asia

Divi-dends

0.2

Specma & GPV

NIBD 2015

0.8

-0.5

1.1

1.6

Kramp and SMB

1.1

Capex

-1.0

Other

0.1

CF opera-tions

NIBD 2016

BioMar adds new production line in Norway to expand production by 30%

DKK

500m2

M&

AC

AP

EX

Notes: 1) Timing of cash flow effect not considered; 2) Initial investments amounted to DKK ~350m (de-bottlenecking and follow-up investments of up to DKK 150m)

280

330

380

430

480

530

580

630

Ja

n

Feb

Ma

r

Ap

r

Ma

y

Ju

n

Ju

l

Au

g

Sep Oct

No

v

Dec

Ja

n

Feb

Schouw & Co.C20 CAP (Schouw & Co. indexed)MidCap (Schouw & Co. indexed)

Improvement in all key financial metrics

Revenue and income DKKm 2016 2015

Revenue 14,369 12,566

EBITDA 1,472 1,214

- margin 10.2% 9.7%

EBIT 1,038 831

- margin 7.2% 6.6%

Associates 566 86

Cash flows DKKm 2016 2015

Cash flows from operating activities 1,598 1,171

Cash flows from investing activities -395 -569

Of which investment in PPE -828 -354

Cash flows from financing activities -925 -324

Invested capital and financing DKKm 2016 2015

Working capital 1,727 1,598

Net interest bearing debt (NIBD) -1,028 -511

Total equity 7,814 6,677

ROIC excl. goodwill 20.2% 18.3%

ROIC incl. goodwill 16.6% 15.1%

NIBD/EBITDA -0.7 -0.4

10.03.20162016 Annual Report 6

2016 2017

+36%∆ 2016

-13%∆ 2016

-1%∆ 2016

Revenue EBITCash flow

(from operations)

Invested capital (excl. goodwill)

62%12%

9%

12%5%

55%

23%

8%

10%4%

58%22%

7%

8%5%

BioMar remains the biggest business in the portfolio10.03.20162016 Annual Report 7

DKK14,369m

DKK1,038m

DKK1,598m

28%

27%

23%

15%

7%

DKK5,416m

BioMar FPC Hydra/Specma

GPVFIN

All businesses contributing to strong performanceRevenue DKKm EBIT DKKm

Cash flow from operations DKKm Net working capital DKKm

10.03.20162016 Annual Report 8

668

68

Hydra/Specma

79

FPC

+14%

GPV1

6

2016FIN

14,369

Others

25

BioMar2015

12,566107

1,076

44

134

549

1

22

FIN GPV1

4

FPC

+25%

1,038

Others 2016Hydra/Specma

831

BioMar

7

2015

247

77

2016

+36%

11 17

1.171

36

26

Hydra/Specma

BioMar2015 GPVFPC Others

1.598

FIN

35 181

339 279

Others

3

GPVHydra/Specma

18

FIN

22

FPC

0

BioMar

+8%

2016

1.727

2015

1.598

Notes: 1) April - December

Acquisitive

FIN only business not delivering ROIC target10.03.20162016 Annual Report 9

Notes: 1) GPV figures full calendar year. 2016 EBIT includes DKK -6m in PPA

GPV1BioMar FPC FIN Hydra/Specma

15%target

RevenueDKKm

EBITDKKm

ROIC ex gw

%

-1%

8.8678.974

2015

35.8%

22.7%

2016

+13.1pp

0%

1.7921.797

-2.3pp

2016

18.4%

2015

20.7%

+6%

1.222 1.301

8176

+6%

-0.1pp

7.7%7.8%

2015 2016

1.747

+190%

603

11178

+42%

2015

16.1%

28.9%

-12.8pp

2016

6153

+15%

15.9%

na

2015 2016

877

+3%

855

581

447

+30% -3%

246253

Revenue DKKm ROIC %EBIT DKKm & %

8,8678,451

201620152014

-1.2%

2012

8,9748,227

2013

8,702 581

447434394

438

+30.1%

2016

6.6%

2015

5.0%5.1%

2013

5.3%

2014

4.5%

2012

+13.1pp

2016

16.6% 16.4%

35.8%

2015

22.9% 22.7%

2014

20.1%

2012 2013

22.8%16.6% 14.7%

24.4%

Excl. GW Incl. GW

BioMar: All-time high ROIC performance10.03.20162016 Annual Report 10

Financials• Solid EBIT improvement by DKK 134m

• Flat revenue and volume development

• Driven by margin management, increased sales of functional feed and one-offs

• R&D farming and subsidies add DKK 50m

• Debtor provisions DKK 44m lower than LY

• Record-high ROIC performance (35.8%); strong EBIT and DKK ~340m lower NWC (extended supplier credits and increased supply chain financing)

Segments• Salmon North Sea and EMEA compensate

decline in Chile (due to algal bloom)

• EBIT increases in Norway driven by volumes and functional feed sales

• Greece restructured with active participation from BioMar

• Reinforced the strong position in Denmark

• Acceleration JV in China with M&A

2017 outlook• Platform for further growth established

• New capacity in Norway, Turkey and China

• Positive volume expectations despite challenging market conditions

• Recovery in Chile, focus on functional feed and increase in salmon feed volumes

• 2017 sales expected DKK ~9.4bn

• Progress in underlying operational EBIT expected at DKK 510-550m guidance

Revenue DKKm ROIC %EBIT DKKm & %

1,792

-0.3%

2016

1,797

20142013

1,787

1,459

20152012

1,554246253

171164156

10.7% 9.6%

2013

13.7%

-2.8%

2012 2015

14.1%

2014

10.6%

2016

19.2%

2014 20152013

13.5%14.4%

2012

-2.4pp

13.6%13.4%

18.4%20.7%

2016

12.6% 12.8%

17.1%

Excl. GW Incl. GW

FPC: On par with record 2015 performance 10.03.20162016 Annual Report 11

Financials• 2015 positively impacted by FX and raw

material development (DKK ~50m)

• 2016 on par with LY’s strong performance

• Performance sustained due to increased focus on value add (particularly in Asia)

• Lower COGS by efficiencies in production

• Strong ROIC at 18.4%

Segments• Revenue increase in Malaysia and Innowo

Print balancing out revenue decline in Denmark

• Solid EBIT driven by Malaysia and Innowo Print by increased value-added focus

• Lower activity/profit in Denmark due to upgrade of a production line

• Good commercial progress in Malaysian print activities

2017 outlook• Significant investment program

• Continued demand increase in Asia

• Focus on value-added products (softness, light material, print)

• Revenue expected to reach DKK 2.0bn

• EBIT expected at DKK 230-260m

Revenue DKKm ROIC %EBIT DKKm & %+6.5%

2016

1,301

20152014

1,0481,222

901

20132012

933

817662

3728

2012

3.1% 4.0%

2016

+5.6%

2013 20152014

6.2%6.2%5.9%

7.7%7.0%

2015

5.1%

2012 20162014

7.5%

-0.1pp

2013

8.4%7.8%

3.8% 3.5%

7.0%

4.7%

Incl. GWExcl. GW

FIN: M&A activity has lifted revenue10.03.20162016 Annual Report 12

Financials• Continued progress in sales and EBIT

• Revenue increase due to Turkish acquisition and increased European sales

• EBIT% and ROIC at 2015 level

• Decline in South Africa offsetting solid progress in European business

• ROIC is lower than 15% target due to underperformance in South Africa and relatively large tied-up capital

Segments• Good performance on all European sites

• Solid performance from the Czech site driven by efficiency improvements

• Challenging market environment in the US and South Africa

• Strong sales development in auto, construction and wipes

• South Africa is loss making (EBIT -17m)

2017 outlook• Strong market position from investments

in capacity expansion, value add and innovation

• Stable market activity expected

• Focus on NPI and continued transformation from ‘volume to value’

• Revenue expected to reach DKK 1.4bn and EBIT to land at DKK 80-100m

Revenue DKKm ROIC %EBIT DKKm & %

603566480527

1,747

+189.8%

201420132012 20162015

111

786046

6712.9%

20162014

6.3%

2015

+41.7%

9.6%

2013

10.6%12.7%

2012 2015

+-12.8pp

2016

28.9%

13.6%16.1%

22.6%

28.9%22.6%

2013 20142012

18.2%21.3%

18.2%21.3%

Incl. GWExcl. GW

Hydra/Specma: Specma acquisition a game-changer10.03.20162016 Annual Report 13

Financials• Specma has lifted revenue with DKK 1.1bn

and EBIT with DKK 49m before PPA

• Pre-acquisition activities delivered growth in both revenue and EBIT

• EBIT% and ROIC adversely impacted by Specma’s relatively weaker performance

• ROIC still over 15% target

• Harvesting of synergies (primarily sourcing) progressing as planned

Segments• Stronger position after Specma acquisition

• Better platform to service international customers

• Strong development in wind and auto but soft in marine and mining

• Pressure from global customers on lower prices

2017 outlook• Continued integration and further

utilisation of the combined platform • Solid position to long-term growth• Positive outlook in wind and auto offsetting

challenges in some of the other segments (particularly marine)

• Revenue expected to reach DKK 1.8bn• EBIT expected at DKK 100-120m

Revenue DKKm ROIC %EBIT DKKm & %

855

+2.6%

2016

877

201520142012 2013

6153

+13.9%

2016

6.1%

2014

6.9%

2013 20152012

15.9%15.9%

2015 2016201420132012

Excl. GW Incl. GW

GPV: Strong performance from the newest member10.03.20162016 Annual Report 14

Financials• Solid performance of the newest business

• Best-in-class EBIT margin performance

• Good sales and production efficiency

• ROIC performance above target

• ROIC including goodwill already above 15% in first year of ownership

Segments• Strong performance in Thai operation

• Solid demand in many segments

• Effect from long-term customer relations

• Mexico commercially operational Q1 2017 supporting customers in the region

• Increased activity in DK-electronics following acquisition of BHE

2017 outlook• Sales growth from production in Mexico

and acquisition of BHE

• Ongoing focus of translating pipeline into long-term business

• Revenue development driven by internal strengths and sound market conditions

• Negative EBIT from one-off integrations costs in 2017 from BHE acquisition

• Revenue expected to reach DKK ~975m and EBIT to land at DKK 50-60m

Attractive growth prospects across our industries10.03.20162016 Annual Report 15

Fish feeds Hygiene nonwovens

Industrial nonwovens

Hydraulics EMS

2420

~4%

2015 2020

2.0

~5%2.5

20202015

3,3

2,3

2015

~8%

2020

71

53

2020

~6%

2015

446

331

~6%

20202015

Global GDP growth (2015-20)

3.7%

Volume (million tonnes) Value (USDb)Volume (million tonnes)Volume (million tonnes) Value (USDb)

Sources: IMF (GDP); Euromonitor (nonwovens); GTAI (EMS); Internal analysis (Fish Feed; Valentum research (Hydraulic)

Profit guidance 201710.03.20162016 Annual Report 16

DKK million

2017

outlook

2016

actual

2015

actual

BioMar 510-550 581 447

Fibertex Personal Care 230-260 246 253

Fibertex Nonwovens 80-100 81 76

Hydra/Specma 100-120 111 78

GPV 50-60 44

Other c. -30 -24 -23

Total EBIT 1000-1060 1,038 831

Associates etc. c. 20 566 86

Financial items, net c. -25 -27 -46

Profit before tax 995-1055 1,578 871

*1 *1

Notes: *1) Including DKK 24m from PPA effect in Specma; *2) GPV only recognised in 9 months of 2016; *3) Group expectations; *4) Associates in 2016 includes sale of shares in Kramp and SMB

*2

BioMar

Fibertex Personal Care

GPV

Fibertex Nonwovens

Hydra/Specma

Schouw & Co. Sum of EBIT ranges is 940-1,060m.

Ending in the lower end is less likely, hence Group estimate DKK 1,000-1,060m

Fast integration of BHE results in negative 2017 effect from the acquisition

Ramp-up production in Mexico

2017 will be a year of consolidation and integration between Hydra and Specma

Double-digit investment in ‘next level’

Progress set to continue with effect from new capacity and acquisitions

Uncertain market conditions in S. Africa

Installation of Line 8 and phasing in print activities bring additional costs

DKK ~50m positive one-offs in 2015

2016 effect from R&D farming activity and R&D grants. Total of DKK ~50m

2016 provisions DKK 44m below 2015

*4

*3

Summing up04.03.20162016 Annual Report 17

Best EBIT and ROIC performance ever in Schouw & Co.

Strong progress on all key financials

Well-proved ownership model – delivering on goals

Financial versatile despite significant investments

Well-balanced portfolio with active M&A agenda

All businesses contributing to strong performance

ROIC target realised for all businesses except FIN

Attractive growth rates in all industries

Performance driven by margin management, focus on value-add and global production platform

Well-positioned for further growth through CAPEX programs, M&A agendas and adaptable organisations

Schouw & Co. level

Business level

Schouw & Co. strategy recap

Vision and mission

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

trustworthy manner

We put together a portfolio of leading Danish industrial businesses, which we develop through value-creating, active and long-term

ownership

VISION MISSION

DIVERSIFIED

PORTFOLIO ACTIVE AND

DEVELOPING

OWNERSHIP

OPENNESS

FINANCIAL

VERSATILITY

STRATEGIC

ELEMENTS

PROFITABLE

GROWTHEFFICIENT

USE OF

CAPITAL

FUTURE-PROOFING

ACTIVE

OWNERSHIP

MODEL

Modus Operandi

Diversified portfolio

INDUSTRYB2B with preferences for pro-cessing industry & logistics

SIZEMinimum revenue, or potential of, 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

Results are created by people