Schouw & Co. shareholder magazine 2012

www.schouw.dk

Shareholder magazine

Key figures (DKK million)

n Like last year, Schouw & Co. will not be printing and distributing a conventional annual report in 2013. We have prepared this shareholder magazine containing only very general financial information and management reporting to be read in conjunction with our actual annual report. The 2012 Annual Report is available in electronic format at www.schouw.dk.

The shareholder magazine is a collection of articles to tell you a bit about where our businesses will be going in the years ahead. We hope it will give you a good impression and understanding of our portfolio and the very attractive businesses we constantly work to develop and optimise.

BioMar p. 8

Fibertex Personal Care p. 10

Fibertex Nonwovens p. 12

Grene p. 14

Hydra-Grene p. 16

income statement and BaLance 2012 2011 2010 2009 2008

Revenue 12,478 11,074 9,451 8,440 9,821

Operating profit before depreciations (EBITDA) 1,163 968 753 588 757

EBITDA margin 9.3% 8.7% 8.0% 7.0% 7.7%

Operating profit (EBIT) 772 644 369 190 124

EBIT-margin 6.2% 5.8% 3.9% 2.3% 1.3%

Associates etc. -5 -26 -1 -11 4

Fair value adjustments of financial investments -68 -556 -518 41 -872

Other net financials -86 -87 -92 -118 -144

Profit/(loss) before tax 613 -24 -241 102 -865

Tax on the profit/(loss) for the year -145 -31 115 -29 -38

Profit from continuing operations 469 -55 -127 73 -904

Profit for the year from discontinued operations 29 -18 167 78 0

Profit/(loss) for the year 498 -72 40 151 -903

Total equity 4,627 4,230 4,395 4,753 4,635

Net interest-bearing debt (NIBD) 2,023 2,745 2,166 2,281 2,996

Total assets 10,381 9,901 8,900 9,659 10,153

the financiaL ratios 2012 2011 2010 2009 2008

Average number of employees 2,873 2,688 3,166 3,334 3,743

Return on invested capital (ROIC) 15.2% 14.1% 9.8% 5.8% 7.3%

NIBD/EBITDA 1.74 2.34 2.88 3.88 3.96

Dividend per share 5.00 4,00 3.00 3.00 3.00

Share price at year end 149.00 92.50 133.50 94.45 76.21

Net asset value per share 196.25 178.62 183.93 177.15 168.25

Price/net asset value 0.76 0.52 0.73 0.53 0.45

This publication is a translation of the Danish shareholder magazine.The original Danish text shall be controlling for all purposes, and in cases of discrepancy, the Danish wording shall be applicable.

2

Martin has been divested and has therefore been reclassified from a consolidated business to discontinued operations. The comparative figures for 2011 in the income statement have been restated accordingly, whereas compoarative figures for balance sheet items are not restated.

Best operating profit everSchouw & Co. had a very good year in 2012. Sev-eral times during the year, we were quite surprised by how well our businesses were performing, returning in 2012 the best operating profit in our company’s 135 year history. We are very proud of this achievement.

Over the past few years, we have made a dedicated effort to help each of our businesses strengthen their market position and grow both their top and bottom lines. The highly satisfactory performance we saw in 2012 is a result of our per-sistent commitment to exercising active ownership with a continual focus on profitable growth, the efficient use of capital and priming each company’s strategic platform for the future.

Fundamentally, as the owner of our businesses, we are in for the very long term, but now and again the time comes to make changes to our portfolio. If an attractive buying opportunity comes our way, we make use of it, and we also acknowledge and accept it if one of our companies might have better opportunities to develop under someone else’s ownership.

Late in 2012, we sold Martin Professional to Harman of the USA, a global leader in professional audio equipment. Martin has been under Schouw & Co.’s ownership since 1999 and has certainly had its ups and downs during that time. The economic crisis affected Martin more than most, but after an extensive realignment of its business model and with a strong commitment from management and staff and substantial investments in innovation and product development, the company has now emerged with its strongest platform ever. Its suc-cessful transformation – together with the poten-tial synergies in a comprehensive value proposition combining audio, light and video – was one of the things that convinced Harman to invest so much in Martin. We believe that Martin will have good op-portunities to continue growing and evolving under their new ownership.

Given the current prospects for 2013, it looks as though we have our work cut out for us if we are to match our excellent performance of 2012. Our businesses are all strategically well positioned to tackle the challenges that may arise, and we are prepared to act swiftly and firmly if things do not progress as we expect. Schouw & Co. has the financial muscle and the commitment to make the best decisions for the long term.

Jens Bjerg Sørensen, President Aarhus, March 6, 2013

3

A historically good year

Financial performanceThe Schouw & Co. Group had a historically good year in 2012, with both revenue and earnings fully meeting expectations.

The most recent consolidated guidance for FY 2012 revenue of just over DKK 13 billion and EBIT in the DKK 800-820 million range was inclusive of Martin Professional. Martin was a member of the Group for the entire year, but because on Decem-ber 19, 2012, we agreed to sell the company, Mar-tin is not recognised in our consolidated revenue and EBIT in the income statement, but is instead stated as a separate line item under discontinued operations.

The companies of the Schouw & Co. Group reported revenue of DKK 13,410 million in 2012. As Martin’s revenue of DKK 932 million is recognised separately, the Group’s consolidated revenue amounted to DKK 12,478 million.

The strong improvement relative to the com-

parative 2011 revenue of DKK 11,074 million was mainly provided by BioMar and the two Fibertex businesses, but the rest of the portfolio businesses also reported improvements.

The Group’s businesses reported aggregate EBIT of DKK 824 million for 2012. Deducting Mar-tin’s EBIT of DKK 52 million less costs relating to the divestment from this figure leaves a consoli-dated EBIT for the year of DKK 772 million.

All portfolio businesses contributed to the improvement relative to the comparative EBIT for 2011 of DKK 644 million, with the exception of Hydra-Grene and Xergi, both reporting EBIT in line with the year before.

Based on unchanged financial expense and substantial improvements in value adjustment of financial investments and profit from associated undertakings, the consolidated profit before tax improved to DKK 613 million in 2012 from a DKK 24 million loss in 2011.

Dividend up by DKK 1 per share

Net interest-bearing debt/EBITDA

EBIT growth

Revenue growth

DKK 51.7x20%13%

EBIT forecast

EBIT actual

Revenue forecast

Revenue actual

DKKm 2013 2012 2013 2012

BioMar 380-420 438 c. 9,000 8,227Fibertex Personal Care 160-170 156 c. 1,600 1,459Fibertex Nonwovens 25-35 28 c. 950 901Grene 75-85 93 c. 1,400 1,353Hydra-Grene 50-60 67 c. 500 527Others (incl. eliminations) -10-0 -10 c. 50 11Total 680-770 772 c. 13,500 12,478

4

Group developmentsThe most significant event of the year was the sale of Martin Professional to US corporation Harman International Industries. Signed on December 19, 2012, the deal was valued at about DKK 917 million. The transaction was subject to regulatory approval, which was subsequently given, and the deal was finalised at the end of February 2013.

In other events, several of our portfolio com-panies expanded their business activities during the year. In July, BioMar officially opened a new factory in Costa Rica, and production from the site was gradually increased over the second half of the year.

Fibertex Personal Care expanded production during the year at its newest production line in Malaysia. The company also started up work to further expand its facility in Malaysia, which will increase capacity by about 30% in 2014.

Fibertex Nonwovens acquired the majority shareholding in French nonwovens manufacturer Tharreau Industries in 2011 and bought the rest of the shares in 2012, before delisting the company. Effective at the beginning of 2012, the company changed its name to Fibertex Nonwovens S.A. and is now wholly owned by Fibertex Nonwovens.

Grene completed a demerger of its Polish organisation into two units: one to run the whole-sale operations, mirroring the Grene operations in other countries, the other to operate Grene’s many retail outlets spread across Poland. Grene is also expanding its warehouse facilities in Poland and is working on a major expansion of its warehouse facilities in Denmark.

After the end of the financial year, the Group divested its holding of 1,000,000 shares in Lerøy Seafood Group for cash proceeds of DKK 145 million. The shares were originally acquired in connection with the sale of BioMar’s subsidiary Sjøtroll Havbruk in the autumn of 2010.

OutlookOur portfolio companies generally had a suc-cessful year in 2012, and the substantial revenue improvement, combined with a moderate change in costs, produced good financial results. Expecta-tions for 2013 are generally more modest, but we expect to continue a strong performance on the consolidated level.

Most of our portfolio companies expect a revenue improvement in 2013. This is particularly true of BioMar, whose revenue is expected to be markedly affected by an increase in raw materials prices, and of Fibertex Personal Care, as increased business activity is expected to drive up revenue. The other businesses also expect to increase their revenue, with the exception of Hydra-Grene, which is budgeting for slightly less revenue than in 2012.

In terms of EBIT, BioMar has lowered its expec-tations relative to 2012 due to a more competitive market. Grene and Hydra-Grene also expects a slightly lower performance, whereas the remaining companies project EBIT to be in line with or better than 2012.

Overall, Schouw & Co. expects to generate con-solidated revenue in the vicinity of DKK 13.5 billion in 2013. Revenue may change quite substantially due to changes in raw materials prices, without necessarily having any effect on earnings.

Schouw & Co. applies a profit forecast range for each individual business, and aggregating these ranges indicates consolidated EBIT guidance for 2013 within the range of DKK 680–770 million.

As in previous years, earnings are expected to be unevenly distributed over the year and to be lowest in the first quarter and highest in the third quarter of the year.

The profit for the year will be lifted by the gain from the sale of Martin, but this gain is not in-cluded in consolidated EBIT. We expect to provide a more detailed breakdown of the gain in the Q1 2013 interim report.

5

DividendThe Board of Direc-tors recommend to the Annual General Meeting that the dividend for 2012 be raised by 25% to DKK 5 per share, for total dividend payments of DKK 128 million, equal to 3.4% of the mar-ket capitalisation at December 31, 2012.

Schouw & Co.’s business concept consists of two main components: putting together a portfolio of businesses and developing the businesses in the portfolio. Developing the businesses in our portfolio is a continual process, and changes to the portfolio may be infrequent.

The “Best Owner” philosophyWe apply what we call our ‘Best Owner’ philosophy when putting together our portfolio of businesses. Schouw & Co. is the best owner when we can strategically develop a company and ensure it has a business model that can bring out the company’s long-term potential. We are the best owner if we can develop and transform the company through active ownership. We can also be the best owner if having that role is a long-term prerequisite for obtaining maximum value in a divestment of the company. When we add a new business to our portfolio, we always think long-term investment and never have a pre-planned exit date.

There may be situations in which Schouw & Co. may no longer be the best owner for a portfolio company, for example, if structural changes to the value chain causes a change to the company’s strategic platform or if other players could gener-ate substantial industrial synergies and a much stronger valuation.

Divesting Martin ProfessionalLate in 2012 we announced the divestment of Martin Professional to US-based Harman Inter-national Industries. The rationale for the sale was that Harman would be in a better position to grow and develop Martin on a long-term horizon. As the world’s leading manufacturer of professional audio equipment Harman saw a good opportunity to capitalise on its strong position in both mature markets and growth markets and provide inte-grated audio, lighting and video solutions. The total value of the transaction was about DKK 917 million, which we found very attractive.

Still, a sale of Martin would not have been possible without our years of believing in the company’s business model, its employees and its potential. During the time Martin was in our port-folio, we invested substantial amounts in future-proofing products and services, and even in 2009, when Martin incurred an EBIT loss of DKK 200 million, we made it a priority to spend some DKK 50 million on product development.

Impressive developmentsCombined with a large number of other projects, Martin’s persistent focus on technology innovation means that it now has the strongest LED-based product portfolio in the industry. Recent years’ exciting product launches paved the way for a 9% revenue increase to DKK 932 million in 2012. That is a very impressive performance in an industry still reeling from the effects of the global eco-nomic crisis.

Martin’s EBIT improved from a modest DKK 2 million in 2011 to DKK 55 million in 2012, and is thus at the top end of Martin’s guidance range, which the company, in fact, raised several times during 2012. This highly satisfactory performance was driven especially by Martin’s new products, mainly the MAC Aura and the MAC Viper.

A timely divestment

6

BioMar is the world’s third-largest manufacturer of quality feed for the industrialised fish farming industry. The company produces feed for more than 25 different species ranging from coldwater species such as salmon and trout to Mediterranean and tropi-cal species such as sea bass, sea bream and tilapia.

Fish is the world’s superfoodThe surging global population presents a number of nutritional challenges – and fish is part of the solution.

Wild fish stocks in the oceans are a limited resource, but fish farming offers a sustainable alter-native with huge growth potential. Over the past few decades, fish farming on a global scale has become a billion-dollar industry, and Norway alone produces about one million tonnes of salmon each year.

Fish farming is a highly efficient means of food production. Fish use almost all of their energy to grow, so a very large proportion of the feed goes directly to growth.

Feed for 25 different speciesBioMar produces annually almost one million tonnes of fish feed a year at its factories in Norway, Chile, Denmark, Scotland, France, Spain, Greece and Costa Rica. Although species-specific, all fish feed is based on the same set of basic principles, one of the most important of which is sustainability. More than 75% of BioMar’s current production is salmon feed.

BioMar is known and renowned for its high-standard quality feed, delivering food safety based on key factors such as traceability. Constantly optimising feed recipes and sourcing the right raw materials are key competitive parameters, and

BioMar

Global growth in fish farming

Torben Svejgård,CEO, BioMar

BioMar has invested heavily in recent years to build a global R&D organisation.

R&D is a strategic focus area for BioMar because research can also be a major factor in developing feed types for species that currently do not form part of the company’s feed range. In 2012, BioMar and a business partner built a factory in Costa Rica to produce feed for tilapia, one of the world’s most predominant fish farming species. The production in Costa Rica represents only a relatively small part of BioMar’s overall output.

The factory was fully operational by the end of 2012. Also in Costa Rica, BioMar recently opened a tilapia research facility for testing feed under con-trolled conditions. The facility is the only one of its kind in Central America and expected to improve product development even more for BioMar.

Focus on limited resourcesAs the production of fish feed is a relative energy-intensive process, BioMar regularly runs projects intended to minimise energy consumption. In fact, reducing its consumption of limited resources is an important objective for BioMar, whose production units filter wastewater and reduce emissions to air to reduce odour, and are also increasingly using heat recovery systems.

Some of the raw materials in fish feed are in limited supply or relatively expensive, and BioMar is always looking for alternatives to such raw ma-terials to gain a competitive edge, both for BioMar and the company’s customers.

Strong prospects for continuing growthFish farming is undergoing strong growth globally, and the market is expected to grow by an estimated 5-6% per year. It takes up to three years to produce a salmon, and fish farmers’ release of fry depends partly on salmon prices. Although this may cause fluctuations in supply and demand, the market for fish feed is generally much less cyclical than the fish farming market, because there is no correlation between the price of fish feed and the price of fish.

Schouw & Co. helps BioMar pursue a growth strategy that inherently involves continual expan-sion and investment, and whose main focus is profitable long-term growth.

DKK million 2012 2011 Revenue 8,227 7,269

Operating profit (EBIT) 438 362

EBIT margin 5.3% 5.0%

Profit before tax 452 225

Average number of employees 847 761

Total assets 4,686 4,061

Equity 1,777 1,569

Net interest-bearing debt 584 552

ROIC 22.8% 22.1% Revenue (DKKm)’08 ’09 ’10 ’11 ’12

5,32

1

4,85

4 5,41

9

7,26

9

8,22

7

9

Global growth in hygiene products

Fibertex Personal Care is one of the world’s largest manufacturers of spunbond/spunmelt nonwoven fabrics for the personal care industry. The com-pany’s products are key components in nappies, sanitary towels and incontinence products.

An indispensable materialFibertex Personal Care produces non-woven textiles from polypropylene, an oil-based polymer. Manufacturing nonwovens is an integrated process in which a plastic granulate is extruded into a thin film on a high-speed belt. The material is not absorbent, but its very soft surface and structure gives it a pleasant skin feel.

The textiles are supplied as semi-manufactures in large rolls and processed by the personal care industry into nappies and sanitary towels, among other things. A lorry carrying 12 tonnes of non-woven material leaves the factory every hour, 24 hours a day, 365 days a year. Every two hours, a fully loaded lorry brings new raw materials to the factory.

The production process is relatively energy-intensive, so Fibertex Personal Care always has an eye out for ways to save energy at its facilities in Denmark and Malaysia. Another major focus is product development and the possibilities of developing thinner products and thereby reducing the consumption of polypropylene.

The production process is applied all over the world and as such is not unique. Fibertex Personal Care’s core competencies lie in the ability to pro-duce a highly uniform and pure product, in working with customers to develop new and improved products, and in providing dynamic service that is second to none. These are qualities Fibertex Per-sonal Care has developed to the point of perfection.

World’s largest companies in its customer baseFibertex Personal Care has some of the world’s largest companies in its customer base. One of them is Procter & Gamble, the maker of Pampers nappies and Always sanitary towels. Procter & Gamble has about 80,000 suppliers worldwide, and every year fewer than one in a thousand of them receive the company’s ”Excellence Award”. Fiber-tex Personal Care has won that award in four of the

past five years. Fibertex Personal Care is a supplier to virtually all of the major nappy manufacturers, including SCA (Libero and Libresse) and Kimberly Clark (Huggies).

Increasing the output capacityAnother important parameter is the ability to time investments correctly. Setting up a new produc-tion line costs about DKK 300 million, and the company has regularly invested in expanding the output capacity, most recently in 2012, when work on a fourth production line began. This will bring Fibertex Personal Care’s annual production capac-ity in Malaysia to about 70,000 tonnes in addition to its capacity in Denmark of about 45,000 tonnes per year. Combined, that is about 8–9% of the global consumption of spunbond material.

Surging demand The extra output capacity has already been sold to customers in South East Asia, as hygiene levels are improving dramatically in that region. Market pene-tration for disposable nappies is close to 100% in the USA and Europe, whereas it is quite low in several parts of Asia. For example, the average Indian or Chi-nese family with small children does not traditionally use disposable nappies, so there is a huge growth potential. With better hygiene comes better health, so through its products Fibertex Personal Care is helping to support a very positive trend.

A growing market, a streamlined organisation and lean and trimmed production plants mean that Fibertex Personal Care is well equipped to continue delivering top and bottom line results.

DKK million 2012 2011 Revenue 1,459 1.314





Total assets 1,567 1,555

Equity 653 634


ROIC 13.4% 13.7%

Mikael Staal Axelsen, CEO, Fibertex Personal Care

Revenue (DKKm)

1,09

0

935

1,23

7 1,31

4

1,45

9

’08 ’09 ’10 ’11 ’12

Fibertex Personal Care

10

New material with enormous potential

Fibertex Nonwovens is Europe’s leading manu-facturer of nonwovens for industrial applications. Its production facilities are in Denmark, the Czech Republic, France and South Africa, and it is a major supplier of nonwovens for the automotive, building and furniture industries. Fibertex Nonwovens also produces a number of value-added products that ini-tially meet a niche demand but which in future may be used in large-scale projects all over the world.

A unique materialNonwoven fabrics are a very light material but also a very strong one with a number of unique proper-ties added in the production process. By combining different raw materials such as polypropylene, pol-yester, cotton or viscose in production technologies such as fiber spinning, polymer extrusion, carding, needling and applying various surface treatments, Fibertex Nonwovens manufactures various textiles with unlimited possible uses. Nonwovens are used as geotextile products in the building industry, as a protective lining for concrete structures, as breather-cloth in the composite industry, as carpet backing, as cover products for the furniture and mattress industry, in clothing and insulation, and for noise reduction in the auto industry. In fact, there is no end to the uses of this material.

Strategic investment in value-added productsThe economic crisis has dealt a hard blow to many industry sectors. However, a strong commitment to developing new innovative value-added products to complement the traditional and highly competi-tive high-volume products is a launching pad for new growth. As unique products often spread

across the globe, this also makes Fibertex Nonwo-vens attractive to industries based outside Europe. The company’s new strategy is expected to bring new growth and earnings in coming years.

Growing market share in the auto industryIn 2011, Fibertex Nonwovens acquired a majority interest in a competing French company and in 2012 bought the rest of the shares. The acquisi-tion and the synergies achieved have provided a remarkable lift to Fibertex Nonwovens, especially in the automotive industry, where the French com-pany is strongly positioned.

There is still a great deal of growth potential for nonwovens in the auto industry. On average, every new car manufactured in Europe contains about 30 m2 of nonwoven fabrics. Nonwovens are used inside the car and for heat insulation and soundproofing of engine compartments and wheel housings. Nonwovens are also increasingly used in car manufacturing outside Europe, and especially North American carmakers are taking inspiration for their car production from Europe.

Responsible production using the Danish modelFibertex Nonwovens aims to retain its position as the leading and most innovative player in the industry while also taking a highly responsible approach to the environment, its customers and its employees. The company has implemented Denmark’s high environmental, safety and energy efficiency standards at each of its state-of-the-art production facilities, and the Danish manage-ment model with a high degree of autonomy and a flat management structure has earned Fibertex Nonwovens a great deal of respect among leading industry specialists. For example, Fibertex Non-wovens manufactures nonwovens in South Africa in a close partnership with IFU and also supports several initiatives to develop the local economy, such as Black Economic Empowerment.

Fibertex Nonwovens will be tackling the chal-lenges of Europe’s stagnant economy in the next few years, but its long-term strategy, stronger market position and massive investments make the future look bright for Europe’s nonwovens leader.

DKK million 2012 2011 Revenue 901 726

Operating profit (EBIT) 28 -7

EBIT margin 3.1% -1.0%

Profit before tax 3 -26


Total assets 986 1,058

Equity 323 356


ROIC 3.8% neg.

500

415

413

726

901

Jørgen Bech Madsen, CEO, Fibertex Nonwovens

’08 ’09 ’10 ’11 ’12

Revenue (DKKm)

Fibertex Nonwovens

13

Over the past 20 years, Grene has evolved into a market-leading trading and logistics company and specialist supplier to agriculture and industry in the Nordics, Poland, the Baltic States and Russia. In re-cent years, the company has successfully acceler-ated growth through a carefully timed strategy.

The Nordics: Serving agriculture and industryCarrying an inventory of about 200,000 items, Grene supplies virtually anything to agricultural customers throughout the Nordic region. The com-pany serves its customer base, consisting mainly of tractor and machinery dealerships, from central warehouses in Denmark and Sweden, offering next-day delivery through retailers or direct to the farm.

Grene generates about 20% of its sales from industrial customers, including the wind turbine industry which is one of Grene’s specialist fields.

All products in Grene’s advanced webshop are available for order 24 hours a day all year round. As much as 90% of orders are received online, and with the company’s state-of-the-art automated ware-houses, very little manpower is needed to make a sale. With the machines Grene provides becoming more and more complex, there is a growing need to offer consultation over the telephone. Catering to this demand gives Grene a strong competitive edge.

Both agriculture and industry are stagnant in Denmark and, to some extent, in the other Nordic countries as well. However, Grene’s revenue is not directly affected by the customers’ cyclical financial situation because a side-effect to the eco-nomic crisis is a growing demand for spare parts. Many farmers defer investments in new machinery and equipment when facing financial difficulties,

so they need to have their equipment repaired and maintained, and that is good for Grene’s business.

In addition, machinery dealerships and busi-nesses in industry have cut back considerably on their inventories in recent years in order to reduce their working capital. This also means extra rev-enue for Grene, because customers know that they can get what they need from one day to the next.

Agriculture expanding in eastern EuropeWhile the agricultural industry is going stagnant in the Nordic countries, it is growing in eastern and central Europe, and the potential there is huge. Denmark has 2.7 M hectares of agricultural land, whereas Poland has 13 M and Russia as much as 123 M hectares of cultivated land.

Grene is a market-leading agricultural whole-saler in Poland, operating 90 retail outlets and also supplying other dealers as well. In 2012, the company launched a franchise concept that has so far grown to 12 stores carrying the Grene assort-ment and operating under the Grene name.

Grene also operates through a partnership in Russia and is currently developing a promising business platform there. Overall, Grene’s strat-egy is to expand to countries where both market growth and a good brand indicate a number of opportunities for growth.

Horizontal expansionIn the years ahead, growth will derive not only from agriculture, but also from associated sectors. Over the past three or four years, Grene has been preparing to expand into the park and gardens business, a large segment in markets where Grene is already present. Other segments are also open for Grene to apply its successful business model and strong brand through horizontal expansion.

Grene plans to continue its expansion strategy in 2013, but reducing costs will still be a priority. The challenge is to accelerate and hit the brakes at the right time, so growth stays under control and the timing stays right. Current market positions need to be strengthened and expanded and new markets cultivated, and with recent years’ investments in logistics, infrastructure and IT, Grene stands well prepared to execute its expansion plans.

DKK million 2012 2011 Revenue 1,353 1,307





Total assets 1,004 931

Equity 359 285


ROIC 12.8% 12.5%

1,30

7

1,14

0 1,23

7 1,30

7

1,35

3

Carsten Thygesen,CEO, Grene

’08 ’09 ’10 ’11 ’12

Grene

Preferred supplier to agriculture

Revenue (DKKm)

14

Hydra-Grene is the leader in the Danish hydraulics market and a global leader in hydraulics solu-tions for the wind turbine industry. The company carries more than 40,000 hydraulic components and designs and manufactures advanced hydraulic solutions for the industrial OEM and aftermarket. Hydra-Grene is known and recognised for its ex-ceptional know-how and is becoming the strategic partner of choice to more and more customers.

World-class hydraulicsHydraulics is a crucial and essential part of many companies’ production apparatus. Without hydrau-lics, the oil industry, the food industry, the building industry, the marine sector, the energy sector and a good many other sectors would not be the same, and mobile units like cranes, lifts, lifting and dig-ging equipment would not exist at all.

In other words, hydraulics is what makes so-cieties tick all over the world, and the principle behind it – liquid under pressure – is relatively simple. On the other hand, hydraulics is also used for a great many sophisticated high-tech applica-tions, and this is where Hydra-Grene really shows its true strength.

Trading, production and know-howAs a trading company, Hydra-Grene is the leader in Denmark when it comes to carrying hydraulic components such as hoses, fittings, filters or valves. More and more, standard products and re-orders are sold on the company’s online webportal, whereas other types of product require advice and support.

That same know-how is applied when Hydra-Grene designs advanced hydraulic platforms for

its customers. Hydra-Grene generates much of its revenue from hydraulic blocks, and the company owes much of its success to its ability to add value to all parts of a customer’s production value chain.

While the economic crisis has caused industry activity to decline, it has been an opportunity for Hydra-Grene to take on a more important role. Business and industry have generally cut back considerably on their inventories due to the crisis, which means many companies increasingly rely on specialist wholesalers that master the art of inven-tory management, logistics and providing service.

Winds softeningHydra-Grene generates almost half of its revenue from the global wind turbine industry, and being present in Europe, North America, China and India, it enjoys a unique position. The company has been involved in the Danish wind turbine industry from the very beginning, working with leading global manufacturers to design, develop and manufac-ture hydraulic solutions for turbine gearbox, brake, cooling and lubricating systems.

Most people are aware of the challenges the wind turbine industry faces, and on the near-term horizon, Hydra-Grene will feel the negative effects of weak activity in this sector. But there is an off-setting factor even to this prospect: manufacturers are increasingly outsourcing parts of their business to strategic partners, and a growing number of wind turbines the world over require maintenance and renovation. This is good for Hydra-Grene, both in the short and long term, but a general recovery in the global wind turbine industry would naturally have a highly favourable effect.

Continued good prospectsDuring 2012, Hydra-Grene negotiated with Sauer-Danfoss to become their main distributor in Denmark, and the two companies have concluded a strategic partnership agreement covering the Danish market. That will give Hydra-Grene an even stronger position in hydraulics solutions for mobile units.

Although its customers are experiencing weak growth, Hydra-Grene has managed to continue to deliver decent financial results, and the company clearly expects to continue this performance in 2013.

DKK million 2012 2011 Revenue 527 465





Total assets 373 398

Equity 182 186


ROIC 21.3% 24.1%

Erik Lodberg,CEO, Hydra-Grene

’08 ’09 ’10 ’11 ’12

531

417

391

465

527

Strong know-how and good prospects

Hydra-Grene

Revenue (DKKm)

17

XergiSchouw & Co. has been involved in the biogas field since 2001, and today co-owns Xergi on a fifty/fifty basis together with Hedeselskabet.

Xergi is one of Europe’s leading suppliers of turnkey biogas systems. Its core business consists of technology development, systems design and installation, as well as turnkey system operation and maintenance.

Biogas has excellent prospects as an alter-native source of energy that could in future help solve the ever-growing need for energy, while also providing environmental solutions.

Xergi generated revenue of DKK 118 million in 2012 and expects to increase revenue by a signifi-cant margin in 2013.

IncubaSchouw & Co. has been part owener at Incuba since 2000 and currently has a 49% interest in the company. Incuba is a co-owner of the Incuba Science Park, which runs three science parks in Aarhus, Denmark and is currently building a fourth one: Navitas Park in the Port of Aarhus.

In addition, Incuba has ownership interests in Østjysk Innovation, a government-approved innovation environment, and Scandinavian Micro Biodevices, a company developing and producing point-of-care veterinary diagnostic products.

Financial investmentsSchouw & Co. has been involved in the wind turbine industry since 1994, originally as the main shareholder of what was then Micon, which became NEG Micon in 1997 and a part of Vestas in 2004. The wind turbine industry has experienced some difficult challenges in recent years, but the long-term prospects for renewable energy and Vestas’ position as the world’s leading manufactu-rer of wind turbines offer some attractive perspec-tives.

Schouw & Co. holds 4 million shares in Vestas. The stake had a market value of DKK 127 mil-lion at December 31, 2012. The holding of Vestas shares is not a strategic stake.

Schouw & Co. also had one million shares in Lerøy Seafood Group at December 31, 2012. A sale of that stake in January 2013 produced cash proceeds of DKK 145 million.

PropertyIn addition to the operational properties of the portfolio companies, the parent company Schouw & Co. owns four properties directly. At December 31, 2012 two of these were the parent company’s head office in Aarhus and a factory site in Lystrup outside Aarhus, which is currently leased to Schouw & Co.’s former portfolio company Elopak Denmark.

In connection with the divestment of Martin, Schouw & Co. took over two properties in Frede-rikshavn in February 2013, both of which are still being used by Martin.

Financial CalenderApril 11, 2013 Annual general meetingMay 2, 2013 Release of the Q1 2013 interim reportAugust 15, 2013 Release of the H1 2013 interim reportNovember 7, 2013 Release of the Q3 2013 interim report

Other investments

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Board of DirectorsJørn Ankær Thomsen, Chairman Erling Eskildsen, Deputy Chairman Niels Kristian AgnerErling LindahlKjeld JohannesenJørgen WisborgAgnete Raaschou-Nielsen

Executive ManagementJens Bjerg Sørensen, PresidentPeter Kjær, Vice President

Jens Bjerg Sørensen, President

Jørn Ankær Thomsen, Chairman

Schouw & Co. sharesSchouw & Co.’s 25.5 million issued shares are listed on NASDAQ OMX Copenhagen under the short name SCHO.

At the end of 2012, the company held 1,938,363 treasury shares, equal to 7.60% of the share capital. The market value of the holding of treasury shares was DKK 289 million at December 31, 2012. The portfolio of treasury shares is recognised at DKK 0.

The official price of Schouw & Co. shares at December 31, 2012 was DKK 149.00 (all trades), and the total market capitalisation of the company’s listed share capital amounted to DKK 3,800 million. Adjusted for the holding of treasury shares, the company’s market capitali-sation was DKK 3,511 million.

Shareholder structureSchouw & Co. has some 7,600 registered shareholders. Schouw & Co. has at the end of 2012 registered the following shareholders as holding 5% or more of the share capital:

Givesco A/S 28.09%Direktør Svend Hornsylds Legat 14.82%Aktieselskabet Schouw & Co. 7.60%

Pursuant to the provisions of Section 31 of the Danish Securities Trading Act, the three share-holders Givesco A/S, Direktør Svend Hornsylds Legat and Erling Eskildsen, who holds 3.94%, are considered as a single shareholder of Schouw & Co. The three shareholders hold in aggregate 46.85% of the shares in the company.

Published in March 2013 by Aktieselskabet Schouw & Co.

Photos: Tybjerg tekst & foto, www.ttf.dk

Design and production: Datagraf, www.datagraf.dk

Schouw & Co.’s web site – www.schouw.dk – con-tains press releases and company announcements, as well as more detailed information on the Group. Interested parties are also invited to subscribe to the company’s news service.

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Share price in DKK

jAN 12 FEB 12 MAR 12 APR 12 MAY 12 juN 12 jul 12 AuG 12 SEP 12 OCT 12 NOv 12 DEC 12 jAN 13 FEB 13

Share price increase in 2012

61%

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Aktieselskabet Schouw & Co.

Chr. Filtenborgs Plads 1DK-8000 Aarhus CT +45 86 11 22 [email protected]

Schouw & Co. shareholder magazine 2012

Documents

Transcript of Schouw & Co. shareholder magazine 2012