Annual report 2017

Significant revenue improvements, growth and expansion

Schouw & Co. had a good year of significant revenue improvements, exciting acquisitions and large increases in business activity, and EBIT improved despite increased competition.

The 2017 consolidated revenue was up by 19% to DKK 17,032 million from DKK 14,369 million in 2016. Organic growth was at 10%, with all portfolio companies contributing strongly to the improvement. To this should be added the effects of the most recent company acquisitions that were not consolidated for the corresponding periods of 2016.

EBIT for the year improved from DKK 1,038 million in 2016 to DKK 1,093 million in 2017. Compared to 2016, this year’s EBIT was affected by acquisition costs of DKK 11 million and additional depreciation and adjustment resulting from purchase price allocation (PPA) totalling about DKK 51 million. BioMar’s reported EBIT for 2017 was slightly better than expected, though still a bit lower than last year’s exceptionally good performance, while the other portfolio companies, including the most recent acquisitions, reported EBIT in line with expectations, with the exception of HydraSpecma, which ended the year short of expectations.


Realised in 2017

  • Revenue rose by 19% to DKK 17,032 million (2016: DKK 14,369 million)

  • EBIT rose to DKK 1,093 million (2016: DKK 1,038 million) despite increased competition

  • ROIC excl. goodwill was 17.6 % (2016: 20.2%)

  • High level of activity, i.a. with the acquisition of industrial company Borg Automotive thereby establishing a sixth portfolio leg, BioMar’s acquisition of Alimentsa, and in addition hereto substantial investments in growth and expansion in the portfolio companies

  • Proposal to increase the dividend for the 2017 financial year by 8% to DKK 13 per share.

Outlook for 2018

  • The Group will defend strategic market positions and will invest in retaining competition strength

  • Continued investments in capacity and in enhancing competences

  • For 2018, we expect consolidated revenue of about DKK 18.1 billion, EBITDA in the range of DKK 1,665-1,805 million, and EBIT in the range of DKK 1,110-1,250 million.

Group development in 2017

BioMar reported strong growth in volumes sold with the largest improvement taking place in the salmon business, but developments in foreign exchange rates and prices of raw materials have curbed the revenue increase. Performance fell slightly short of the exceptionally good results of the preceding year, mainly due to more competitive markets. The company’s non-consolidated joint ventures in Turkey and China are developing well and are steadily becoming more important for BioMar’s overall business activity. In addition, BioMar is preparing to establish a new factory in Tasmania, which is scheduled for completion by the end of 2019.

Fibertex Personal Care
Fibertex Personal Care reported a considerable revenue improvement driven mainly by higher volumes in Malaysia and an increase in business activity at Innowo Print. EBIT improved due to progress reported in Malaysia and by Innowo Print. In addition to investments in Europe and Asia, Fibertex Personal Care took steps in 2017 to establish a production unit for direct print on nonwovens in the USA.

Fibertex Nonwovens
Fibertex Nonwovens reported a broadly based revenue improvement with all production sites contributing. EBIT also improved despite extremely challenging developments in raw materials prices throughout the  year. The company invested to upgrade and expand its production apparatus in 2017 and established operations in Brazil after the end of the financial year by acquiring nonwovens manufacturer Duci.

HydraSpecma grew its revenue based on improvements in a number of business segments, but continues to feel a slump in demand in some segments. Sales to the wind power segment were in line with last year, but with a very different geographical breakdown. EBIT fell by a considerable margin year on year, in part due to higher production costs resulting from unexpectedly high demand in certain segments and significant costs incurred in relation to activities in China.

Borg Automotive
Borg Automotive reported a year-on-year revenue improvement for the 2017 calendar year. EBIT also improved when disregarding depreciation and adjustments related to the purchase price allocation made in connection with the acquisition and for non-recurring costs incurred prior to the acquisition at 3 April 2017.

GPV reported a significant revenue improvement that was mainly based on organic growth, including establishing operations in Mexico, and from the acquisition of BHE, an electronics manufacturing services company, earlier in the year. EBIT also improved considerably, even with the integration costs incurred during the period in relation to the BHE acquisition, the start-up in Mexico and other business activity expansion. 

Statement by Jens Bjerg Sørensen, President of Schouw & Co.:

”We had a satisfactory performance in 2017. Put briefly, 2017 was a year in which we met our profit guidance. We saw fast paced developments and a focused effort in all our portfolio businesses – but it was also a year in which we experienced increasing competition in several markets.

All of our businesses added to the revenue improvement, with the largest contributions coming from Borg Automotive (acquired in 2017), GPV (acquired in 2016) and BioMar. Underlying the performance figures were considerably higher volumes sold, though the effects were diluted for some of our largest business areas in BioMar and Fibertex Personal Care by lower prices and unfavourable developments in foreign exchange rates. Our robustness was tested, and we responded by capturing market share..

Our EBIT for the year also reflects positive performances from all businesses with the exception of HydraSpecma, which incurred extraordinary costs, and BioMar, whose financial results for 2016 included significant income streams relating to special circumstances that did not recur to the same extent in 2017. In addition, the extensive investment activity in 2017 resulting in transaction costs and PPA-related adjustments had a natural impact on our financial results. When adjusted for these special items, we achieved a solid improvement in our underlying earnings in 2017.

As part of our Go Strong strategy, we invested more than DKK 3 billion in value-adding initiatives and company acquisitions in the course of 2016-2017. In 2017 alone, we invested more than DKK 2 billion to further position and expand the capacities in our businesses, including productivity improvements and product development.

All of our businesses hold a leading position in their respective industries, an international profile and not least an agile corporate and management culture that combined with Schouw & Co.’s active ownership approach ensures value creation. Being prepared to accept new active owners is essential when we review various investment opportunities, and that is exactly the spirit we encountered at Borg Automotive, and obviously also at GPV when we acquired that company in 2016.

It will take inspiration and talented employees for us to retain our leading position in product and business development, so we will continue to invest in competence-building, digitalisation and innovation in 2018.”

Conference call

Schouw & Co. will be hosting a teleconference (in English) for analysts, the media, etc. on 
Friday 9 March 2018 at 09.00 CET.

Those wishing to attend the conference are invited to call one of the following numbers: 
DK: +4535445583 // UK: +442031940544 // SE: +46856642661 // US: +18552692604.


Aktieselskabet Schouw & Co.

Jørn Ankær Thomsen, Chairman
Jens Bjerg Sørensen, President, tel. +45 8611 2222

Please read the annual report in full here.