Company announcement No. 6/2012, May 3, 2012 28 pages
Interim report – First quarter of 2012
Highlights The Schouw & Co. Group got off to a very good start to the year in the first quarter of 2012. Revenue improved by 33% to DKK 2,919 million, driven by improvements in all of our businesses. EBIT was up by DKK 115 million to a profit of DKK 147 million. Value adjustment of financial investments represented an expense of DKK 12 million. The profit before tax amounted to DKK 108 million. Schouw & Co. raises the full-year EBIT forecast to the range of DKK 720-800 million from the previous forecast
of DKK 660-740 million.
Schouw & Co. will be holding a telephone conference (in Danish) for analysts, members of the press a.o. on telephone +45 3271 4767, on
THURSDAY, MAY 3, 2012 AT 15.30 Questions relating to the above should be directed to Jens Bjerg Sørensen, President, on tel. +45 8611 2222.
Aktieselskabet Schouw & Co. Chr. Filtenborgs Plads 1 DK-8000 Aarhus C CVR no.: 63965812 Tel. +45 86 11 22 22 www.schouw.dk schouw@schouw.dk
Contents Financial highlights .............................................. 2 Interim report ...................................................... 3 Business areas...................................................... 6 Management statement .................................... 18 Income statement.............................................. 19 Cash flow statement .......................................... 20 Balance sheet ..................................................... 21 Statement of changes in equity ......................... 23 Notes to the financial statements ..................... 24
This is a translation of Schouw & Co.’s Interim Report for the three months ended March 31, 2012. The original Danish text shall be controlling for all purposes, and in case of discrepancy, the Danish wording shall be applicable.
Consolidated financial highlights January 1 –March 31
Amounts in DKK million
YTD 2012
GROUP SUMMARY Revenue
YTD 2011
2011 TOTAL
2,918.7
2,187.4
11,929.0
Operating profit before depriciation (EBITDA)
256.3
127.7
1,049.3
EBIT before goodwill impairment
146.6
31.5
653.1
Operating profit (EBIT)
146.6
31.5
646.3
(11.3)
(26.0)
Profit/(loss) after tax in associates
(1.3)
Profit from divestments
0.0
Value adjustment of financial investments**
(12.0)
0.0
1.9
181.3
(556.2) (107.2)
Net financials before value adjustment of financial investments
(25.7)
(17.4)
Profit before tax
107.6
184.1
(41.2)
Tax on profit
(29.3)
(56.0)
(30.8)
Profit for the period
78.3
128.1
(72.0)
4,268.7
4,449.0
Share of equity attributable to shareholders of Schouw & Co. Minority interests Total equity
4,196.1
34.8
2.7
33.9
4,303.5
4,451.7
4,230.0
Total assets
9,931.0
9,075.1
9,900.5
Net interest-bearing debt (NIBD)
2,800.7
2,566.4
2,744.6
Working capital
2,320.8
1,890.2
2,146.8
3,360
3,166
3,287
Cash flows from operating activities
40.2
(194.8)
418.8
Investments in property, plant and equipment
66.9
199.1
564.4
Depreciation of property, plant and equipment
95.3
79.7
324.6
Return on equity (%) *
(2.8)
ROIC (%) *
15.5
11.1
13.8
Equity ratio (%)
42.7
Other financial data Average number of employees
3.3
(1.7)
43.3
49.1
EBITDA margin (%)
8.8
5.8
8.8
EBIT margin (%)
5.0
1.4
5.4
NIBD/EBITDA *
2.4
3.1
2.6
Per share data Earnings per share (of DKK 10)
3.30
5.37
Net asset value per share (of DKK 10)
181.30
186.23
178.62
(3.07)
Share price at end of period (of DKK 10)
92.50
122.00
146.50
Price/net asset value
0.67
0.79
0.52
Market capitalisation
2,872.6
3,499.8
2,173.0
The financial ratios have been calculated in accordance with “Recommendations & ratios 2010”, issued by the Danish Society of Financial Analysts. * Annualised over the latest 12 months. ** Value adjustment consists of value adjustments and dividends from the holdings of shares in Vestas and Lerøy.
2
Interim report – First quarter of 2012 Financial performance Revenue EBITDA EBIT Value adj. fin. investment Profit before tax
YTD 2012 YTD 2011 2,918.7 2,187.4 256.3 127.7 146.6 31.5 (12.0) 181.3 107.6 184.1
2011 when net financials were lifted by a DKK 4 million profit from the sale of securities in BioMar.
Change 731.3 128.6 115.1 (193.3) (76.5)
Accordingly, our consolidated profit before tax for Q1 2012 was DKK 108 million, compared with a DKK 184 million profit in Q1 2011.
Liquidity and capital resources
Overall, the Schouw & Co. businesses were off to a very good start to 2012. Consolidated revenue was up by 33% from DKK 2,187 million in Q1 2011 to DKK 2,919 million in Q1 2012.
All companies of the Schouw & Co. Group have made it a priority in recent years to reduce their working capital tieup and net interest-bearing debt. During 2010, after a period of relative caution, some of the Group's businesses again began to pursue a more expansive strategy. That made it necessary in several instances throughout 2011 to step up investments and increase the working capital tie-up, even though generally improving profitability continues to take priority over revenue growth.
The revenue improvement was provided especially by BioMar's strong improvements in Norway and Chile and by Fibertex Nonwovens, whose 2011 acquisition of its French subsidiary was fully recognised in the Q1 2012 financial statements. The Group's other wholly owned businesses also contributed to the improvements. Xergi, the pro rata consolidated joint venture, reported Q1 revenue and earnings in line with last year.
Operating activities resulted in a cash inflow of DKK 40 million in Q1 2012, compared with an outflow of DKK 195 million in Q1 2011. Cash flows for investing activities in Q1 2012 amounted to DKK 78 million, against DKK 197 million in Q1 2011.
EBIT improved by DKK 115 million from DKK 32 million in Q1 2011 to DKK 147 million in Q1 2012. The main contributors to the improvement were BioMar as well as Martin and Fibertex Nonwovens. The latter two both turned last year's Q1 loss into a profit this year. In addition, Fibertex Personal Care, Hydra-Grene and Grene also contributed to the improvements. The reported EBIT improved by more than we had expected in what was overall a highly satisfactory performance that supports our expectations for positive profit developments in 2012.
The consolidated net interest-bearing debt amounted to DKK 2,801 million at March 31, 2012, as compared with DKK 2,566 million at March 31, 2011. Events causing changes to the new interest-bearing debt in the intermittent period included the acquisition of Fibertex Nonwovens' French subsidiary in May 2011, dividend payments of DKK 71 million to the shareholders of Schouw & Co. and treasury share purchases totalling DKK 66 million.
The Group's result from associates, which is stated after tax, improved from a DKK 11 million loss in Q1 2011 to a DKK 1 million loss in Q1 2012.
Of the consolidated net interest-bearing debt at March 31, 2012, the parent company’s share amounted to a DKK 256 million receivable.
The Q1 2012 profit before tax was affected by a negative value adjustment on financial investments of DKK 12 million, as compared with a positive value adjustment of DKK 181 million in Q1 2011. The group's other financial items increased to an expense of DKK 26 million in Q1 2012, due to a higher average net interest-bearing debt and moderate exchange rate adjustments, from DKK 17 million in Q1
The Group’s working capital tie-up increased from DKK 1,890 million at March 31, 2011 to DKK 2,321 million at March 31, 2012. The main reason for the larger working capital tie-up was the higher level of activity by BioMar and the acquisition of Fibertex Nonwovens' French subsidiary.
3
Financial investments
Outlook
Schouw & Co. holds 4,000,000 shares in Vestas, equal to 1.96% of the share capital, and 1 million shares in Lerøy Seafood Group, equal to 1.83% of the share capital.
Overall, the companies of the Schouw & Co. Group performed well during the first quarter of 2012, reporting very good financial results relative to previous years.
Combined, the financial investments made a negative contribution of DKK 12 million to the consolidated financial items in Q1 2012. In Q1 2011, the effect was positive at DKK 181 million.
The first quarter is normally a low season for Schouw & Co., as most of the Group's businesses have abundant spare capacity and above-normal activity during this period can have a very good effect on earnings.
VESTAS Number of s ha res hel d Pri ce (DKK) Ma rket va l ue (DKKm)
At Mar. 31, At Dec. 31, 2012 2011 4,000,000 4,000,000 56.60 62.00 226.4 248.0
LERØY Number of s ha res hel d Pri ce (NOK) Excha nge ra te DKK/NOK Ma rket va l ue (DKKm) *
At Mar. 31, At Dec. 31, 2012 2011 1,000,000 1,000,000 94.00 84.00 97.84 95.88 92.0 80.5
However, the full-year results will depend strongly on the results of the second half of the year and especially of the third quarter. Our businesses generally have high capacity utilisation during this part of the year and can only to a limited extent step up their business activity levels.
Change 0 (5.40) (21.6)
While we are fully aware that a successful full-year performance requires that many different factors interact during the upcoming high season, the good performance of the first quarter of 2012 has nevertheless made us raise our FY 2012 profit guidance. The upgraded guidance is based mainly on BioMar and secondarily on Fibertex Nonwovens, Grene, Hydra-Grene and Martin.
Change 0 10.00 1.96 11.4
* DKK 1.9 million of this change has been recognised directly in equity under exchange rate adjustments.
The profit guidance for other businesses includes Xergi, which continues to expect to improve both revenue and earnings in 2012.
Schouw & Co. shares Schouw & Co.’s share capital comprises 25,500,000 shares with a nominal value of DKK 10 each for a total nominal share capital of DKK 255,000,000. Each share carries one vote, for a total of 25,500,000 voting rights.
Overall, therefore, the Schouw & Co. Group now projects full-year 2012 consolidated revenue of just over DKK 13 billion against the previous forecast of approximately DKK 12.5–13.0 billion. The revenue may change quite substantially due to changes in raw materials prices, without necessarily having any notable effect on profit.
Schouw & Co. shares appreciated by 31.9% during the first quarter of 2012, from DKK 92.50 per share at December 31, 2011 to DKK 122.00 per share at March 31, 2012.
Treasury shares
The FY 2012 EBIT is upgraded to the range of DKK 720–800 million from the previous forecast of DKK 660–740 million, which is a further step up from the substantial EBIT improvement to DKK 646 million in 2011 from DKK 369 million in 2010.
At the end of 2011, the company held 2,008,363 treasury shares, equal to 7.88% of the share capital. During the first quarter of 2012, Schouw & Co. applied 54,000 of its treasury shares in the Group’s share incentive scheme.
Forecast EBIT (DKK mi l l i on) After Q1 Original Bi oMa r 400-420 360-380 Fi bertex Pers ona l Ca re 145-155 145-155 Fi bertex Nonwovens 20-30 15-25 Grene 85-95 80-90 Hydra -Grene 65-75 60-70 Ma rti n 25-35 20-30 Others (10-20) (10-20) Tota l EBIT 720-800 660-740 As s oci a tes (10) (10) Fi na nci a l s * (120) (120) Profi t before ta x* 590-670 530-610 * Before the effects of financial investments.
Accordingly, the company held 1,954,363 treasury shares at March 31, 2012, equal to 7.66% of the share capital. The portfolio of treasury shares is recognised at DKK 0. On April 11, 2012, the shareholders in general meeting renewed the authority permitting Schouw & Co. to acquire and hold up to 20% of the company’s shares until April 1, 2017.
Events after the balance sheet date Other than as set out elsewhere in this interim report, Schouw & Co. is not aware of events occurring after March 31, 2012, which are expected to have a material impact on the Group's financial position or outlook.
4
Accounting policies
the application of accounting policies and recognised assets, liabilities, income and expenses. The actual results may differ from these judgments.
The interim report is presented in accordance with IAS 34 “Interim financial reporting� as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies.
The most significant estimates are unchanged from December 31, 2011, and the most significant judgment uncertainty related thereto is the same as that used in preparing the Annual Report 2011.
Other than as set out below, the accounting policies are unchanged from those applied in the Annual Report 2011.
Roundings and presentation
Effective from January 1, 2012, Schouw & Co. implemented amendments to IFRS 7 and IAS 12. The implementation did not affect recognition or measurement.
The amounts appearing in this interim report have generally been rounded to one decimal place using standard rounding principles. Accordingly, some additions may not add up.
Reference is made to Annual Report 2011, which contains a full description of the accounting policies.
Judgments and estimates The preparation of interim reports requires Management to make accounting judgments and estimates that affect
Financial calendar for 2012 August 16, 2012 November 8, 2012
Release of H1 2012 interim report Release of Q3 2012 interim report
The company will provide detailed information about contacts and times for webcast and teleconferences held in connection with the announcement of its interim reports on its website, www.schouw.dk, and through stock exchange announcements.
5
BioMar
Wholly owned
BioMar is the world’s third-largest manufacturer of quality feed for the fish farming industry. The company divides its operations into three geographical regions: the North Sea (Norway and Scotland), the Americas (Chile) and Continental Europe.
very strong increase in salmon supply in the first quarter, indicating healthy underlying demand. However, if production volumes continue to increase over the coming months, salmon prices could come under further pressure. This could have financial consequences for salmon farmers and mean a greater risk to BioMar of incurring losses on trade receivables.
Financial performance Although the first quarter is a low season for BioMar, the company got off to a good start to the year, generating a 42% revenue increase from DKK 1,134 million in Q1 2011 to DKK 1,615 million in Q1 2012 on a similar increase in volumes.
The markets of Continental Europe are expected to be relatively stable. Sea bass and sea bream continue to fetch good prices, mainly due to the moderate supply. Prices on single-portion trout have risen slightly, while prices on large trout are affected by the low salmon prices.
The strong improvement was mainly due to two factors. First of all, high water temperatures generally very good climatic conditions in northern Europe during the first quarter, whereas the situation was quite the opposite in 2011. Secondly, the underlying growth in Norway and Chile has continued in 2012. Combined, these two factors have produced unusual first quarter market growth in Norway and sustained strong growth in Chile. In Scotland, the market contracted slightly, while Continental Europe was fairly stable overall.
So far, BioMar has not been affected to any significant extent by the economic turmoil in southern Europe, but uncertainty has escalated. Customers are reporting, especially those in Greece and Spain, that the banks have further tightened their business terms, which could ultimately impact BioMar even though the company is taking a number of precautions to mitigate the risk. The work to set up production in Costa Rica is progressing to plan. The facility is expected to run its first test productions within the next couple of weeks, and operations at normal capacity are expected to begin in Q3 of 2012.
EBIT improved from a DKK 7 million loss in Q1 2011 to a DKK 52 million profit in Q1 2012, with all three regions reporting improvements, particularly Chile. The strong improvement was driven mainly by larger volumes.
At the end of March, the world's largest salmon producer, Marine Harvest, announced that it is considering establishing salmon feed production in Norway. We believe that should the company decide to go ahead with the plans, it may begin in-house production in 2014 or later. A new feed facility in Norway would presumably impact BioMar's sales potential, but the expected time horizon leaves enough time to adjust current plans and to mitigate the negative effects of the new competition.
The Group’s working capital tie-up increased from DKK 570 million at March 31, 2011 to DKK 764 million at March 31, 2012. The increase was due to the higher sales, as working capital as a percentage of revenue was largely unchanged. Adjusted for the payment of intra-group dividends totalling DKK 400 million in the second quarter of 2011 and the first quarter of 2012, net interest-bearing debt actually fell by DKK 98 million; net interest-bearing debt amounted to DKK 804 million at March 31, 2012, compared with DKK 502 million at March 31, 2011.
Outlook The basic assumptions for the guidance for 2012 announced at the release of the full-year interim report by and large still apply. However, the strong start to the year has made BioMar increase its revenue forecast from approximately DKK 7.5 billion to approximately DKK 8 billion, and EBIT is now expected to be in the DKK 400-420 million range instead of the previous forecast range of DKK 360380 million.
Business development In both Norway and Chile, 2012 is expected to be an atypical year in terms of overall market growth. Both markets reported very strong growth in the first quarter, but the performance is expected to weaken as the year progresses, and current estimations for Norway indicate the possibility of a downturn in the fourth quarter.
As always, the revenue guidance depends strongly on how prices of raw materials develop, and the earnings forecast is subject to uncertainty given the early stage of the year.
BioMar has come very close to full capacity utilisation in Chile, and there are strong indications that capacity expansion will become feasible very soon. Norway still has sufficient capacity following the large extension in 2011, and the rest of the BioMar organisation still has sufficient capacity at the moment.
DKK million Volume (1000 t) Revenue - of which North Sea - of which Americas - of which Continental Europe Direct production costs Gross profit
Growth in the feed market is a direct reflection of corresponding growth in the salmon market, meaning that it is not unequivocally positive. The good news is that salmon prices have been stable and slightly increasing despite a 6
YTD YTD 2012 2011 195 139 1,615 1,134 694 495 683 401 238 238 (1,272) (894) 343 240
2011 total 889 7,269 3,734 1,880 1,655 (5,774) 1,495
BioMar January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
1,614.9
1,134.0
7,268.8
Gros s profi t
198.3
114.4
925.1
EBITDA
89.3
22.8
486.9
Depreci a ti on
37.5
29.9
125.3
Operating profit (EBIT)
51.8
(7.1)
361.6
Va l ue a djus tment of s ha res i n Lerøy
9.6
(27.1)
(99.8)
(12.8)
(3.1)
(36.8)
Profit before tax
48.6
(37.3)
225.0
Ta x on profi t Profit for the period
(8.1)
2.7
(83.4)
40.5
(34.6)
141.6
Ca s h fl ows from opera ti ng a cti vi ti es
(85.6)
(206.8)
133.4
Ca s h fl ows from i nves ti ng a cti vi ti es
(16.3)
(55.9)
(200.0)
Ca s h fl ows from fi na nci ng a cti vi ti es
76.5
205.4
109.5
Fi na nci a l i tems , net
CASH FLOW
BALANCE SHEET Inta ngi bl e a s s ets * Property, pl a nt a nd equi pment
325.7
319.1
335.5
1,068.1
988.8
1,076.3
57.8
70.8
59.8
Other non-current a s s ets Ca s h a nd ca s h equi va l ents
414.4
336.4
439.8
Other current a s s ets Total assets
2,065.1
1,653.1
2,149.3
3,931.1
3,368.2
4,060.7
Equi ty
1,436.6
1,553.9
1,568.7
Interes t-bea ri ng debt
1,218.6
838.1
992.2
Other credi tors Total liabilities and equity
1,275.9
976.2
1,499.8
3,931.1
3,368.2
4,060.7
809
729
761
Avera ge number of empl oyees FINANCIAL KEY FIGURES EBITDA ma rgi n
5.5%
2.0%
6.7%
EBIT ma rgi n
3.2%
-0.6%
5.0%
ROIC (a nnua l i s ed)
24.6%
17.9%
22.1%
Worki ng ca pi ta l
764.5
570.4
640.1
Net i nteres t-bea ri ng debt
804.2
501.7
552.3
* Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK 430.2 million.
7
Fibertex Personal Care Fibertex Personal Care is among the world's five largest manufacturers of spunbond/spunmelt nonwovens for the personal care industry, used mainly for nappies, sanitary towels and incontinence products.
Wholly owned increase capacity by about 30% in 2014. This extension can help Fibertex Personal Care share in the expected growth in the Asian market. The central location in Malaysia gives the facility a solid platform for making competitive shipments to all of south-east Asia.
Financial performance
Procter & Gamble recently named Fibertex Personal Care an environmental sustainability supplier for its improving key environmental indicators. Procter & Gamble has introduced an environmental stability scorecard, and Fibertex is one of only 17 suppliers to score top marks, making the company one of Procter & Gamble's most environmentally conscious suppliers.
Fibertex Personal Care lifted revenue by 13% from DKK 313 million in Q1 2011 to DKK 355 million in Q1 2012. The improvement was driven by an increase in sales resulting from an increase in production capacity in Malaysia. EBIT improved from DKK 26 million in Q1 2011 to DKK 37 million in Q1 2012. The advance was especially due to the fact that the relationship between prices of raw materials and quarterly selling price adjustments was more favourable in Q1 2012 than it was in Q1 2011.
Increasing the share of specialty products is a big priority for Fibertex Personal Care, including supersoft products, products with high performance leakage barriers, lightweight products as well as the print products that Fibertex can deliver through its partly-owned business Innowo Print in Germany.
Fibertex Personal Care increased its working capital tie-up from DKK 228 million at March 31, 2011 to DKK 256 million at March 31, 2012, due to greater business activity.
Outlook
Adjusted for the payment of intra-group dividends of DKK 100 million in the first quarter of 2012, net interestbearing debt actually fell by DKK 36 million; net interestbearing debt amounted to DKK 619 million at March 31, 2012, compared with DKK 555 million at March 31, 2011.
Fibertex Personal Care sees Europe as a market with limited growth opportunities and resulting strong price pressure. Asia is a growing market where price competition is also a factor, but where increasing demand absorbs the surging supply in the region. The company also expects to sell the full capacity at the new production line in Malaysia by the end of 2012.
Business development Fibertex Personal Care has production facilities in Denmark and Malaysia and is well-renowned in both Europe and Asia for its service, quality and innovation.
Fibertex Personal Care maintains its FY 2012 revenue guidance of DKK 1.5–1.6 billion. EBIT will inherently depend on how prices of raw materials develop during the rest of the year. Given the current prospects that the raw materials prices to quarterly selling price adjustments relationship will not be as attractive over the coming months as it was in the first quarter of 2012, the company retains its EBIT guidance in the DKK 145–155 million range.
It is extremely important to the company's customers that they have very reliable supplies as well as sufficient flexibility in their sourcing of nonwovens, allowing them to respond to market fluctuations. The market is generally very demanding in terms of products and product performance, and product quality is a huge priority. After the new production line in Malaysia was successfully installed in September 2011, the products manufactured on the line have been tested and approved by the relevant customers.
DKK million Revenue - of which Denmark - of which Malaysia
In April 2012, Fibertex Personal Care announced plans for a further extension of the facility in Malaysia, which will
8
YTD 2012 355 197 158
YTD 2011 313 195 118
2011 total 1,314 796 518
Fibertex Personal Care January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
354.6
313.3
1,313.7
Gros s profi t
60.2
50.1
238.1
EBITDA
66.5
52.8
242.8
Depreci a ti on
29.9
27.1
94.4
Operating profit (EBIT)
36.6
25.7
148.4
Fi na nci a l i tems , net
(5.1)
(3.4)
(8.5)
Profit before tax
31.5
22.3
139.9
(12.2)
(4.9)
(36.3)
19.3
17.4
103.6
Ca s h fl ows from opera ti ng a cti vi ti es
76.5
37.6
148.7
Ca s h fl ows from i nves ti ng a cti vi ti es
(7.6)
(121.2)
(266.5)
Ca s h fl ows from fi na nci ng a cti vi ti es
(34.4)
82.6
107.3
26.0
27.9
26.2
Property, pl a nt a nd equi pment
924.7
839.3
944.2
Other non-current a s s ets
124.4
89.4
130.8
44.8
19.7
10.2
Ta x on profi t Profit for the period CASH FLOW
BALANCE SHEET Inta ngi bl e a s s ets *
Ca s h a nd ca s h equi va l ents Other current a s s ets Total assets
424.2
378.7
443.5
1,544.1
1,355.0
1,554.9
Equi ty
555.5
529.8
633.5
Interes t-bea ri ng debt
663.7
574.4
599.1
Other credi tors Total liabilities and equity
324.9
250.8
322.3
1,544.1
1,355.0
1,554.9
368
317
322
EBITDA ma rgi n
18.8%
16.9%
18.5%
EBIT ma rgi n
10.3%
8.2%
11.3%
ROIC (a nnua l i s ed)
14.4%
16.0%
13.7%
Worki ng ca pi ta l
255.8
228.4
284.4
Net i nteres t-bea ri ng debt
618.9
554.7
588.9
Avera ge number of empl oyees FINANCIAL KEY FIGURES
* Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK 48.1 million.
9
Fibertex Nonwovens
Wholly owned
Fibertex is among Europe's leading manufacturers of nonwovens, i.e. non-woven textiles used for a number of different industrial purposes.
ing its capacity for high-value products to the auto industry, for example. Fibertex Nonwovens has worked to align its operations to the market situation, preparing to capitalise on the potential of the growing product segments and geographical growth markets.
Effective in May 2011, Fibertex Nonwovens acquired a majority interest in French nonwovens manufacturer Tharreau Industries, which is recognised in Fibertex Nonwovens' financial statements as from the date of acquisition. Effective January 1, 2012, the French company changed its name to Fibertex Nonwovens S.A.
Following the acquisition of the French business, which manufactures specialist products for the automotive industry and for industrial applications, Fibertex Nonwovens has further strengthened its potential to become Europe's leading manufacturer of industrial nonwovens.
Financial performance Fibertex Nonwovens generated revenue of DKK 249 million in Q1 2012, compared with DKK 120 million in Q1 2011. The improvement was attributable to greater business activity and higher selling prices, but first and foremost to the acquisition of the French business, which generated Q1 2012 revenue of DKK 114 million.
The company is maintaining its sales strategy and the dedicated efforts to expand sales in order to achieve high capacity utilisation and future earnings. As part of that process, the company has built a solid portfolio of new projects, consisting of products for the auto industry and products that will be sold in new geographical markets with shipments gradually beginning during 2012.
Q1 2012 EBIT was DKK 13 million as compared with a DKK 3 million loss in Q1 2011. The improvement was due both to an EBIT improvement in the original Fibertex Nonwovens and to the acquisition of the French business.
As regards raw materials, the first quarter was a period of high prices, and Fibertex Nonwovens is working to gradually align selling prices with developments in the prices of raw materials and the general competitive situation.
The working capital tie-up and the net interest-bearing debt increased at March 31, 2012 relative to March 31, 2011, due to the increase in business activity and the acquisition of the French business.
Outlook Fibertex Nonwovens expects to continue the good business activity in the months ahead. Demand has stabilised in most industrial markets, but the market remains jittery, and rising prices of raw materials will produce an earnings challenge.
Business development The Q1 2012 improvement was driven by a positive sales performance in virtually all business areas, the highlights being an increase in earnings on big volume contracts and increased sales of high-value products as well as high output capacity.
If the positive market developments of the first quarter can be sustained as the year progresses, Fibertex Nonwovens expects to generate FY 2012 revenue of just over the DKK 900 million that was originally forecast. EBIT is expected to improve by a similar margin, i.e. to a range of DKK 20-30 million from the previous forecast of DKK 1525 million.
In addition, Fibertex Nonwovens is reaping the benefits of the structural investments made in recent years, which have reduced the company's general cost base and enhanced its competitive strength. Fibertex Nonwovens has thoroughly modernised and expanded its production platforms, launching new and improved products. Most recently, a large production line was installed at the factory in the Czech Republic, increas-
DKK million Revenue - of which Denmark - of which Czech Republic - of which France
10
YTD 2012 249 70 65 114
YTD 2011 120 62 58 -
2011 total 726 226 240 260
Fibertex Nonwovens January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
248.7
119.7
726.5
Gros s profi t
52.7
18.8
122.2
EBITDA
29.0
6.7
45.6
Depreci a ti on
16.2
9.5
52.7
Operating profit (EBIT)
12.8
(2.8)
(7.1)
Profi t from a s s oci a tes
(1.2)
(1.7)
(5.9)
Fi na nci a l i tems , net
(3.8)
(2.3)
(13.2)
7.8
(6.8)
(26.2)
Profit before tax Ta x on profi t Profit for the period
(2.6)
1.4
7.3
5.2
(5.4)
(18.9)
(6.1)
1.4
12.4
Ca s h fl ows from i nves ti ng a cti vi ti es
(5.2)
(3.6)
(240.1)
Ca s h fl ows from fi na nci ng a cti vi ti es
21.9
2.3
285.3
CASH FLOW Ca s h fl ows from opera ti ng a cti vi ti es
BALANCE SHEET Inta ngi bl e a s s ets * Property, pl a nt a nd equi pment Other non-current a s s ets Ca s h a nd ca s h equi va l ents
70.9
2.0
71.5
515.7
395.8
515.0
22.2
21.3
22.8
70.5
2.7
59.9
422.2
232.5
388.7
1,101.5
654.3
1,057.9
Equi ty
368.1
256.5
355.9
Interes t-bea ri ng debt
585.8
318.7
555.7
Other credi tors Total liabilities and equity
147.6
79.1
146.3
1,101.5
654.3
1,057.9
499
362
449
Other current a s s ets Total assets
Avera ge number of empl oyees FINANCIAL KEY FIGURES
11.7%
5.6%
6.3%
EBIT ma rgi n
EBITDA ma rgi n
5.1%
-2.3%
-1.0%
ROIC (a nnua l i s ed)
1.3%
neg.
neg.
Worki ng ca pi ta l
305.5
164.5
272.0
Net i nteres t-bea ri ng debt
515.3
316.0
495.8
* Excluding goodwill on consolidation in the parent company Schouw & Co. of DKK 32.0 million.
11
Grene
Wholly owned
Grene is a leading supplier of spare parts and accessories for the agricultural sector in the Nordic region, Poland and Russia. In Denmark, Grene is also a supplier of technical articles, electrical products and services for industry.
during the final phase. Grene's next warehouse expansion project is now underway in Denmark, and plans are also being made to extend the facilities in Poland. The Swedish business was the first to install Grene's new ERP system. The implementation of the system in Sweden has been a useful experience for Grene, allowing the company to make some appropriate changes before the system is implemented in other Grene businesses; next up will be Grene Norway and, later this year, Grene Denmark. Implementing a new ERP system is always a strain on a company's resources, but the gradual implementation process is expected to keep the inconvenience to a minimum.
Financial performance Grene lifted revenue by 7% from DKK 307 million in Q1 2011 to DKK 329 million in Q1 2012. The revenue improvement was broadly founded in all Grene's countries of operation. EBIT improved from DKK 15 million in Q1 2011 to DKK 17 million in Q1 2012. In addition to the inherent effect of the revenue improvements, earnings were lifted by a good performance in Grene Denmark.
The positive developments in the industry activities, which are mainly conducted in Denmark, continued and Q1 revenue was in line with last year.
The overall working capital tie-up increased from DKK 411 million at March 31, 2011 to DKK 424 million at March 31, 2012, mainly due to stock building. Inventory alignment is expected over the course of the year.
Outlook The European market is undergoing change at the moment, with international players consolidating their operations and new partnerships being formed. Grene monitors the situation carefully and is preparing to meet the international competition in existing markets and to pursue new business opportunities available in eastern and central Europe.
The company's net interest-bearing debt fell marginally from DKK 479 million at March 31, 2011 to DKK 473 million at March 31, 2012.
Business development Grene generally got off to a good start to the year in the Agro business, even though sales of certain winter products were slightly below normal for natural reasons. Grene Denmark reported a particularly positive performance, and the other Grene businesses performed in line with expectations with the exception of Grene Sweden as that organisation was under strain from a major physical expansion project and the running-in of a new ERP system.
In the Agro business, general market expectations are positive for the coming months, while the outlook for the second half of the year is more uncertain. Price competition is attracting special attention, as it may impact the full-year performance. Generally stable activity is expected in the industry business for the rest of the year. Encouraged by the good start to the year, Grene upgrades its FY 2012 revenue forecast slightly to approximately DKK 1.4 billion from the previous guidance of up to DKK 1.4 billion. Grene raises the full-year EBIT forecast to the range of DKK 85-95 million from the previous forecast of DKK 8090 million.
In Poland, Grene demerged the organisation into two units effective January 1, 2012. One now runs the wholesale operations, mirroring the Grene operations in other countries, while the other operates Grene's 90 retail outlets spread throughout Poland. The de-merger of the Polish operations into a wholesaler and a retailer has been a success, and indications are that the move will generate the expected dynamics and added focus on the two distinct business activities.
DKK million Revenue - of which Industry - of which Agro - in Denmark - in Poland - in Sweden - in Norway - in Finland - other Agro
In Russia, where the activities are run in cooperation with Dutch Kramp Groep, the positive revenue trend continued, although the activities have not yet contributed positively to results. In Sweden, the extension of the company's warehouse facility is coming to an end. The actual expansion of the facilities has progressed to plan, but there were a few delays in the work to install the automation equipment
12
YTD 2012 329 66 263 77 115 37 19 6 9
YTD 2011 307 65 242 72 108 36 16 6 4
2011 total 1,307 254 1,053 290 460 158 80 34 31
Grene January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
328.8
307.2
1,307.1
Gros s profi t
106.4
98.2
442.6
25.0
22.5
118.8
Depreci a ti on
7.5
7.6
29.9
Impa i rment
0.0
0.0
2.0
Operating profit (EBIT)
17.5
14.9
86.9
Fi na nci a l i tems , net
1.2
(4.1)
(23.8)
Profit before tax
18.7
10.8
63.1
Ta x on profi t Profit for the period
(4.5)
(2.4)
(17.4)
14.2
8.4
45.7
Ca s h fl ows from opera ti ng a cti vi ti es
(5.8)
(26.9)
48.4
Ca s h fl ows from i nves ti ng a cti vi ti es
(22.4)
(9.3)
(44.3)
Ca s h fl ows from fi na nci ng a cti vi ti es
30.8
36.7
(8.5)
44.4
31.7
43.2
311.9
307.6
289.6
14.3
15.2
11.9
EBITDA
CASH FLOW
BALANCE SHEET Inta ngi bl e a s s ets Property, pl a nt a nd equi pment Other non-current a s s ets Ca s h a nd ca s h equi va l ents
14.1
16.3
11.5
685.6
588.2
574.8
1,070.3
959.0
931.0
Equi ty
305.0
265.1
285.3
Interes t-bea ri ng debt
508.0
495.4
477.2
Other credi tors Total liabilities and equity
257.3
198.5
168.5
1,070.3
959.0
931.0
914
903
921
EBITDA ma rgi n
7.6%
7.3%
9.1%
EBIT ma rgi n
5.3%
4.9%
6.6%
ROIC (a nnua l i s ed)
12.7%
9.1%
12.5%
Worki ng ca pi ta l
423.7
411.5
392.7
Net i nteres t-bea ri ng debt
473.4
479.0
437.8
Other current a s s ets Total assets
Avera ge number of empl oyees FINANCIAL KEY FIGURES
13
Hydra-Grene
Wholly owned
Hydra-Grene is a specialised trading and engineering company whose core business is trading and producing hydraulic components and systems development for industry as well as providing related consulting services.
new premises where it has established small-scale production. Sales to the US market improved in the first quarter. The entire wind turbine industry is waiting anxiously for a possible PTC (Production Tax Credit) extension, which is extremely important for the future sales potential on the US market.
Financial performance Hydra-Grene lifted revenue by 45% from DKK 106 million in Q1 2011 to DKK 153 million in Q1 2012. The improvement was attributable to generally stronger demand from the wind turbine industry as well as other industry customers relative to the first quarter of 2011.
Outlook From the start of the year, Hydra-Grene anticipated substantial fluctuations in sales during 2012. This still applies, but the level of activity in the wind turbine industry is expected to remain high over the next few months.
EBIT improved from DKK 15 million in Q1 2011 to DKK 24 million in Q1 2012. The improvement was a direct effect of the revenue improvement.
The company also expects a high level of activity for other industry customers over the next few months, but there are indications of a minor slowdown in the slightly longer term.
The overall working capital tie-up increased from DKK 169 million at March 31, 2011 to DKK 221 million at March 31, 2012, due to the increase in business activity and necessary stock building.
After-market sales are improving, and e-trading is becoming an increasingly important revenue driver.
After payment of intra-group dividends of DKK 50 million in the first quarter of 2012, net interest-bearing debt increased to DKK 177 million at March 31, 2012 from DKK 124 million at March 31, 2011.
Sales to the wind turbine industry as well as to other industry customers are marked by fierce price competition which, combined with the strongly fluctuating demand during the year, makes it difficult to optimise costs. In addition, Hydra-Grene will be implementing a new ERP system towards the end of 2012. While the process will lead to optimised business procedures and processes, it will clearly be a temporary strain on the company's resources.
Business development Hydra-Grene is off to a really good start to 2012, reporting improved sales to both the wind turbine industry and to other industry customers. Some of the development projects for the wind turbine industry that Hydra-Grene has been involved in over the past couple of years are now in operation and lifting the company's sales. Hydra-Grene is expanding its output capacity in order to accommodate growing demand.
Encouraged by the high level of activity in the first quarter, Hydra-Grene upgrades its FY 2012 revenue forecast to just over DKK 500 million from the previous guidance of up to DKK 500 million. At the same time, the company raises its full-year EBIT forecast to the range of DKK 65-75 million from the previous forecast of DKK 60-70 million.
Sales to China's wind turbine industry are generally performing as expected, in spite of the generally subdued demand in China. Hydra-Grene's operations in China recently received ISO9000 accreditation. Sales to India's wind turbine industry are also performing as expected, and Hydra-Grene India recently moved to
14
Hydra-Grene January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
153.3
105.5
465.5
Gros s profi t
48.4
34.6
155.5
EBITDA
26.2
17.2
80.5
2.7
2.7
11.3
23.5
14.5
69.2
Depreci a ti on Operating profit (EBIT) Profi t from a s s oci a tes
0.0
0.0
0.4
Fi na nci a l i tems , net
(1.7)
(2.5)
(3.1)
Profit before tax
21.8
12.0
66.5
Ta x on profi t Profit for the period
(5.4)
(3.0)
(16.7)
16.4
9.0
49.8
Ca s h fl ows from opera ti ng a cti vi ti es
8.9
14.3
29.8
Ca s h fl ows from i nves ti ng a cti vi ti es
(7.5)
(0.5)
(12.0)
Ca s h fl ows from fi na nci ng a cti vi ti es
0.7
(4.1)
(23.8)
10.8
0.7
8.6
105.1
107.4
102.4
1.8
1.4
1.8
CASH FLOW
BALANCE SHEET Inta ngi bl e a s s ets Property, pl a nt a nd equi pment Other non-current a s s ets Ca s h a nd ca s h equi va l ents
7.4
21.1
5.4
Other current a s s ets Total assets
298.5
213.2
279.3
423.6
343.8
397.5
Equi ty
152.7
147.0
186.3
Interes t-bea ri ng debt
184.7
145.2
125.5
86.2
51.6
85.7
423.6
343.8
397.5
218
186
196
EBITDA ma rgi n
17.1%
16.3%
17.3%
EBIT ma rgi n
15.3%
13.7%
14.9%
ROIC (a nnua l i s ed)
26.0%
23.5%
24.1%
Worki ng ca pi ta l
221.0
168.6
205.7
Net i nteres t-bea ri ng debt
177.2
124.1
120.1
Other credi tors Total liabilities and equity Avera ge number of empl oyees FINANCIAL KEY FIGURES
15
Martin
Wholly owned
Martin is the world’s leading manufacturer of computercontrolled effect lighting, which is sold to the entertainment and experience industries in most parts of the world. Martin is also a significant manufacturer of smoke machines.
tremely competitive with prices the key parameter as a direct effect of slumping demand. The novelty of the MAC Aura is expected to fade during the second quarter, and Martin expects sales of the product to drop a bit relative to the Q1 performance. On the other hand, Martin recently launched the new MAC Viper, which was very well received in the market and which has already strengthened the company's order book. The MAC Viper will not ship until mid-year, however, so the product will not have a notable effect on Q2 2012 sales.
Financial performance Martin is off to a good start to 2012 revenue-wise, and the positive earnings margin trend reported in the second half of 2011 was maintained in Q1 2012. Martin reported an EBIT profit as well as a profit before tax in each of the first three months of 2012.
The supply chain restructuring continues, as Martin endeavours to lower its break-even point and the working capital tie-up. A number of production assignments were repatriated from China to the factory in Frederikshavn, Denmark, and by the end of the second quarter 2012 all production activity in China will be closed down. Martin is currently developing a new product management concept that it expects to implement in the second half of 2012. Finally, the global distribution centre in the Netherlands is expected to be relocated to Frederikshavn towards the end of the year.
Strong demand for the MAC Aura moving head launched last autumn produced better-than-expected sales during the early months of the year, and Martin reported a 9% revenue improvement from DKK 206 million in Q1 2011 to DKK 223 million in Q1 2012. By increasing volumes and maintaining the improved earnings power, Martin generated an EBIT profit for the third straight quarter. The performance consolidates the effects of adjustments implemented throughout the company and strengthens the expectations for the full-year results.
Despite the repatriation of production to Denmark and the revenue increase, the production staff at Frederikshavn was further reduced in the first quarter. The growing proportion of LED products has reduced the man-hour requirement, as the new technology involves substantially fewer manual assembly processes. The average number of employees was 517 during the first quarter of 2012, against 626 in Q1 2011 and 599 in the 2011 financial year.
EBIT improved from a loss of DKK 9 million in Q1 2011 to a profit of DKK 9 million in Q1 2012, the improvement marking confirmation of the anticipated positive performance. Net interest-bearing debt fell from DKK 477 million at March 31, 2011 to DKK 466 million at March 31, 2012, due to the cash inflows from operations. Martin gives great priority to reducing the working capital tie-up, which amounted to DKK 353 million at March 31, 2012, compared with DKK 343 million at March 31, 2011.
Outlook Martin continues to forecast FY 2012 revenue of approximately DKK 875 million. The second quarter will be a challenge revenue-wise, whereas new product launches are expected to be a positive factor in the second half of the year. At the beginning of the year, Martin forecast FY 2012 EBIT of DKK 20–30 million, but the positive performance of the first quarter has made the company raise the EBIT guidance to the DKK 25–35 million range.
Business development The Q1 improvement was mainly attributable to sales of the MAC Aura. This product has helped Martin win additional market share in LED products for the entertainment industry and overall, LED products accounted for about half of the company's Q1 2012 revenue. The general underlying market growth is estimated to be weaker than the reported revenue growth, and the market remains ex-
16
Martin January 1 –March 31
Amounts in DKK million
YTD 2012
YTD 2011
2011 total
INCOME STATEMENT Revenue
223.4
205.6
854.8
Gros s profi t
62.4
41.5
205.0
EBITDA
24.8
9.8
80.7
Depreci a ti on
15.4
19.1
73.4
Impa i rment
0.0
0.0
5.3
Operating profit (EBIT)
9.4
(9.3)
2.0
Profi t from a s s oci a tes
0.0
1.2
0.4
(4.0)
(1.0)
(21.7)
5.4
(9.1)
(19.3)
Fi na nci a l i tems , net Profit before tax Ta x on profi t
(2.6)
1.3
0.3
2.8
(7.8)
(19.0)
Ca s h fl ows from opera ti ng a cti vi ti es
33.3
(26.0)
(5.0)
Ca s h fl ows from i nves ti ng a cti vi ti es
(10.9)
(6.1)
(39.2)
Ca s h fl ows from fi na nci ng a cti vi ti es
(14.7)
32.4
46.2
Inta ngi bl e a s s ets
129.3
141.8
129.9
Property, pl a nt a nd equi pment
134.3
152.1
138.4
Other non-current a s s ets
47.0
25.9
52.0
Ca s h a nd ca s h equi va l ents
14.5
5.0
6.8
Other current a s s ets
486.2
455.5
507.3
Total assets
811.3
780.3
834.4
Equi ty
178.1
178.7
177.8
Interes t-bea ri ng debt
480.8
481.6
495.5
Other credi tors
152.4
120.0
161.1
Total liabilities and equity
811.3
780.3
834.4
517
626
599
11.1%
4.8%
9.4%
4.2%
-4.5%
0.2%
ROIC (a nnua l i s ed)
12.4%
0.0%
9.4%
Worki ng ca pi ta l
352.8
342.9
363.5
Net i nteres t-bea ri ng debt
466.4
476.6
488.7
Profit for the period CASH FLOW
BALANCE SHEET
Avera ge number of empl oyees FINANCIAL KEY FIGURES EBITDA ma rgi n EBIT ma rgi n
17
Management statement The Board of Directors and the Management Board of Aktieselskabet Schouw & Co. today considered and approved the interim report for the period January 1–March 31, 2012. The interim report, which has been neither audited nor reviewed by the company’s auditors, was prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and Danish disclosure requirements for interim reports of listed companies. In our opinion, the interim report gives a true and fair view of the Group’s assets and liabilities and financial position at March 31, 2012 and of the results of the Group’s operations and cash flows for the period January 1–March 31, 2012. Furthermore, in our opinion, the Management’s report includes a fair review of the development and performance of the Group's activities, the financial results for the period and the financial position of the Group in general and describes the principal risks and uncertainties that it faces.
Aarhus, May 3, 2012
EXECUTIVE MANAGEMENT
Jens Bjerg Sørensen President
Peter Kjær
BOARD OF DIRECTORS
Jørn Ankær Thomsen Chairman
Erling Eskildsen Deputy Chairman
Niels K. Agner
Kjeld Johannesen
Jørgen Wisborg
Agnete Raaschou-Nielsen
18
Erling Lindahl
Income and comprehensive income statement January 1 –March 31
Amounts in DKK million
YTD 2012 YTD 2011
Note 1 Revenue Cos t of s a l es Gross profit
2011 TOTAL
2,918.7 (2,386.1) 532.6
2,187.4 (1,825.6) 361.8
11,929.0 (9,827.9) 2,101.1
Other opera ti ng i ncome Di s tri buti on cos ts 2 Admi ni s tra ti ve expens es Goodwi l l i mpa i rment Other opera ti on expens es Operating profit (EBIT)
3.3 (271.5) (117.5) 0.0 (0.3) 146.6
7.2 (227.4) (109.9) 0.0 (0.2) 31.5
22.8 (1,040.4) (427.5) (6.8) (2.9) 646.3
Profi t from a s s oci a tes Profi t from di ves tments Fi na nci a l i ncome Fi na nci a l expens es Profit before tax
(1.3) 0.0 21.8 (59.5) 107.6
(11.3) 0.0 223.9 (60.0) 184.1
(26.0) 1.9 40.7 (704.1) (41.2)
Ta x on profi t
(29.3)
(56.0)
(30.8)
Profit for the period
78.3
128.1
(72.0)
Attri buta bl e to: Sha rehol ders of Schouw & Co. Mi nori ty i nteres ts
77.5 0.8
128.3 (0.2)
(72.3) 0.3
Profit for the period
78.3
128.1
(72.0)
3.30 3.29
5.37 5.36
(3.07) (3.06)
(7.3)
(66.2)
9.4
(5.5)
10.6
10.6
1.5
2.7
10.3
(0.2) 0.1 0.0 1.2 (10.2)
(15.3) 0.4 0.0 0.5 (67.3)
(19.2) (1.0) (2.7) (0.8) 6.6
78.3
128.1
(72.0)
68.1
60.8
(65.4)
Attri buta bl e to: Sha rehol ders of Schouw & Co. Mi nori ty i nteres ts
67.2 0.9
61.0 (0.2)
(64.5) (0.9)
Total recognised comprehensive income
68.1
60.8
(65.4)
3 Ea rni ngs per s ha re (DKK) 3 Di l uted ea rni ngs per s ha re (DKK) Comprehensive income Excha nge ra te a djus tment of forei gn s ubs i di a ri es etc. Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to cos t of s a l es Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to fi na nci a l s Va l ue a djus tment of hedgi ng i ns truments recogni s ed duri ng the peri od Other comprehens i ve i ncome from a s s oci a tes Other a djus tment on equi ty Ta x on other comprehens i ve i ncome Other comprehensive income after tax Profi t for the peri od Total recognised comprehensive income
19
Cash flow statement January 1 –March 31
Amounts in DKK million
YTD 2012 YTD 2011 Profi t before ta x Adjus tment for opera ti ng i tems of a non-ca s h na ture, etc. Depreci a ti on a nd i mpa i rment l os s es Other opera ti ng i tems , net Provi s i ons Income from i nves tments i n a s s oci a tes a fter ta x Fi na nci a l i ncome Fi na nci a l expens es Cash generated from operations (operating activities) before change in working capital
2011 TOTAL
107.6
184.1
(41.2)
109.7 (19.4) (1.3) 1.3 (21.8) 59.5
96.2 (16.3) 1.8 11.3 (223.9) 60.0
403.0 14.3 8.3 26.0 (40.7) 704.1
235.6
113.2
1,073.8
(166.5) 69.1
(277.6) (164.4)
(428.3) 645.5
Interes t i ncome recei ved Interes t expens es pa i d Cash flows from ordinary activities
13.3 (38.4) 44.0
17.2 (32.8) (180.0)
21.3 (136.0) 530.8
Income ta x pa i d Cash flows from operating activities
(3.8) 40.2
(14.8) (194.8)
(112.0) 418.8
(13.9) (66.9) 0.3 0.0 0.0 0.0 0.0 (0.7) (0.1) 3.4 (77.9)
(3.8) (199.1) 3.1 0.0 0.0 0.0 0.0 (3.1) 0.0 6.0 (196.9)
(56.5) (564.7) 27.3 (207.2) (16.3) (5.0) 2.6 (2.8) (5.5) 25.0 (803.1)
(25.4) 6.5 84.6
(17.9) 33.7 336.4
(196.3) 280.7 527.5
0.0 0.0 4.1 69.8
0.0 (0.6) (4.7) 346.9
(0.2) (71.4) (69.0) 471.3
Cash flows for the period Ca s h a nd ca s h equi va l ents a t Ja nua ry 1 Va l ue a djus tment of ca s h a nd ca s h equi va l ents
32.1 541.3 0.1
(44.8) 451.6 (0.4)
87.0 451.6 2.7
Cash and cash equivalents at March 31
573.5
406.4
541.3
Cha nges i n worki ng ca pi ta l Cash generated from operations (operating activities)
Purcha s e of i nta ngi bl e a s s ets Purcha s e of property, pl a nt a nd equi pment Sa l e of property, pl a nt a nd equi pment Acqui s i ti on of enterpri s es Acqui s i ti on of mi nori ty i nteres ts i n s ubs i di a ri es Acqui s i ti on of a s s oci a tes Di ves tment of s ubs i di a ri es Loa n to a s s oci a tes Purcha s e of s ecuri ti es Sa l e of s ecuri ti es Cash flows from investing activities Debt fi na nci ng: Repa yment of non-current l i a bi l i ti es Proceeds from i ncurri ng non current fi na nci a l l i a bi l i ti es Increa s e (repa yment) of ba nk overdra fts Sha rehol ders : Addi ti ona l mi nori ty s ha rehol ders , net Di vi dend pa i d Purcha s e / s a l e of trea s ury s ha res , net Cash flows from financing activities
20
Balance Amounts in DKK million
AT MAR. 31, 2012
AT DEC. 31, 2011
AT MAR. 31, 2011
AT DEC. 31, 2010
Goodwi l l Compl eted devel opment projects Devel opment projects i n progres s Other i nta ngi bl e a s s ets Intangible assets
941.0 67.0 49.4 76.4 1,133.8
948.2 73.7 49.1 71.0 1,142.0
888.9 95.8 24.9 35.6 1,045.2
904.0 98.4 30.1 42.8 1,075.3
La nd a nd bui l di ngs Lea s ehol d i mprovements Pl a nt a nd ma chi nery Other fi xtures , tool s a nd equi pment As s ets under cons tructi on, etc. Property, plant and equipment
1,470.4 7.1 1,425.5 124.3 127.1 3,154.4
1,460.9 6.7 1,470.0 125.7 89.9 3,153.2
1,230.8 9.7 965.9 93.7 575.6 2,875.7
1,249.7 10.1 1,029.7 98.5 399.0 2,787.0
59.7 250.5 221.8 148.9 680.9
62.7 274.7 217.1 159.6 714.1
80.3 941.0 91.3 103.4 1,216.0
94.1 736.9 134.1 112.5 1,077.6
Total non-current assets
4,969.1
5,009.3
5,136.9
4,939.9
Inventori es Recei va bl es Income ta x recei va bl e Cons tructi on contra cts Securi ti es Ca s h a nd ca s h equi va l ents Total current assets
1,882.5 2,386.2 26.7 0.6 92.4 573.5 4,961.9
1,855.9 2,391.5 17.5 4.1 80.9 541.3 4,891.2
1,620.6 1,733.7 13.3 1.6 162.6 406.4 3,938.2
1,505.4 1,799.8 4.9 8.3 190.0 451.6 3,960.0
Total assets
9,931.0
9,900.5
9,075.1
8,899.9
Note
4
5
4
Equi ty i nves tments i n a s s oci a tes Securi ti es Deferred ta x Recei va bl es Other non-current assets
21
Balance Amounts in DKK million
AT MAR. 31, 2012
Note 6
7
7 7
8
AT DEC. 31, 2011
AT MAR. 31, 2011
AT DEC. 31, 2010
Sha re ca pi ta l Hedge tra ns a cti on res erve Excha nge a djus tment res erve Reta i ned ea rni ngs Propos ed di vi dend Share of equity attributable to the parent company
255.0 (31.4) 120.0 3,823.1 102.0 4,268.7
255.0 (28.5) 127.4 3,740.2 102.0 4,196.1
255.0 (26.0) 47.1 4,096.4 76.5 4,449.0
255.0 (24.7) 113.3 3,971.5 76.5 4,391.6
Mi nori ty i nteres ts Total equity
34.8 4,303.5
33.9 4,230.0
2.7 4,451.7
3.5 4,395.1
Deferred ta x Pens i ons a nd s i mi l a r l i a bi l i ti es Credi t i ns ti tuti ons Other l i a bi l i ti es Non-current liabilities
122.8 40.3 1,016.4 82.1 1,261.6
127.6 37.3 1,021.7 87.7 1,274.3
77.9 33.7 990.3 48.4 1,150.3
73.1 33.6 967.7 51.4 1,125.8
Current porti on of non-current debt Credi t i ns ti tuti ons Cons tructi on contra cts Tra de pa ya bl es a nd other pa ya bl es Income ta x Provi s i ons Current liabilities
265.6 2,108.2 8.1 1,908.8 67.9 7.3 4,365.9
282.7 2,004.3 10.4 2,055.7 34.9 8.2 4,396.2
184.3 1,793.4 0.3 1,454.6 34.1 6.4 3,473.1
185.4 1,457.0 0.6 1,691.1 40.2 4.7 3,379.0
Total liabilities
5,627.5
5,670.5
4,623.4
4,504.8
Total liabilities and equity
9,931.0
9,900.5
9,075.1
8,899.9
Notes wi thout reference
22
Statement of changes in equity
Equity at March 31, 2011
res ts ty q ui Tot al e
(7.4)
-
-
(7.4)
0.1
(7.3)
-
(5.5)
-
-
-
(5.5)
0.0
(5.5)
-
1.5
-
-
-
1.5
0.0
1.5
-
(0.2) 0.1 1.2 (2.9)
(7.4)
0.0 0.0 77.5 77.5
-
(0.2) 0.1 1.2 77.5 67.2
0.0 0.0 0.0 0.8 0.9
(0.2) 0.1 1.2 78.3 68.1
0.0
0.0
0.0
1.3 4.1 5.4
1.3 4.1 5.4
0.0 0.0
1.3 4.1 5.4
255.0
(31.4)
255.0
(24.7)
-
-
113.3 3,971.5
34.8 4,303.5
76.5 4,391.6
(66.2)
-
-
(66.2)
ty q ui Tot al e
rity
in te
res ts
102.0 4,268.7
33.9 4,230.0
Min o
120.0 3,823.1
0.0
Tot al
re c ap it a
Other comprehens i ve i ncome for the peri od Excha nge ra te a djus tment of forei gn s ubs i di a ri es Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to cos t of s a l es Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to fi na nci a l s Va l ue a djus tment of hedgi ng i ns truments recogni s ed duri ng the peri od Other comprehens i ve i ncome from a s s oci a tes Ta x on other comprehens i ve i ncome Profi t for the peri od Total recognised comprehensive income Tra ns a cti ons wi th the owners : Sha re-ba s ed pa yment, net Di vi dend di s tri buted Trea s ury s ha res bought/s ol d Transactions with the owners for the period
in te
-
S ha
Equi ty a t Ja nua ry 1, 2011
rity
-
l
Equity at March 31, 2012
102.0 4,196.1
Min o
(28.5)
Other comprehens i ve i ncome for the peri od Excha nge ra te a djus tment of forei gn s ubs i di a ri es Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to cos t of s a l es Va l ue a djus tment of hedgi ng i ns truments tra ns ferred to fi na nci a l s Va l ue a djus tment of hedgi ng i ns truments recogni s ed duri ng the peri od Other comprehens i ve i ncome from a s s oci a tes Ta x on other comprehens i ve i ncome Profi t for the peri od Total recognised comprehensive income Tra ns a cti ons wi th the owners : Sha re-ba s ed pa yment, net Trea s ury s ha res bought/s ol d Transactions with the owners for the period
127.4 3,740.2
Tot al
255.0
H ed ge res trans erv act e ion Exc han ge res erv adjus e tme nt R et aine de arn in gs Div id e nd
Equi ty a t Ja nua ry 1, 2012
H ed ge res trans erv act e ion Exc han ge res erv adjus e tme nt R et aine de arn in gs Div id e nd
S ha
re c ap it a
l
Amounts in DKK million
3.5 4,395.1
0.0
(66.2)
-
10.6
-
-
-
10.6
-
10.6
-
2.7
-
-
-
2.7
-
2.7
-
(15.3) 0.2 0.5 (1.3)
(66.2)
0.2 0.0 128.3 128.5
-
(15.3) 0.4 0.5 128.3 61.0
0.0 0.0 0.0 (0.2) (0.2)
(15.3) 0.4 0.5 128.1 60.8
0.0
0.0
0.0
1.1 0.0 (4.7) (3.6)
1.1 0.0 (4.7) (3.6)
0.0 (0.6) (0.6)
1.1 (0.6) (4.7) (4.2)
255.0
(26.0)
23
47.1 4,096.4
0.0 0.0
76.5 4,449.0
2.7 4,451.7
Notes Amounts in DKK million
NOTE 1 - Segment reporting Schouw & Co. is an industrial conglomerate consisting of a number of sub-groups operating in various industries and independently of the other sub-groups. The group management monitors the financial developments of all material sub-groups on a regular basis. Based on management control and financial management, Schouw & Co. has identified six reporting segments, which are BioMar, Fibertex Personal Care, Fibertex Nonwovens, Grene, Hydra-Grene and Martin. Included in the reporting segments are revaluations of assets and liabilities made in connection with Schouw & Co.'s acquisition of the segment in question and consolidated goodwill arising as a result of the acquisition. The operational impact of depreciation/amortisation and write-downs on the above revaluations or goodwill is also included in the profit presented for the reporting segment. All transactions between segments were made on an arm’s length basis.
Total reportable segments YTD 2012
Fibertex BioMar Personal Care
External revenue Intra-group revenue Segment revenue Depreciation EBIT Segment assets of which goodwill Equity investments in associates Segment liabilities Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Capital expenditure Average number of employees
1,614.9 0.0 1,614.9 37.5 51.8 4,361.3 732.4 0.0 2,494.5 (85.6) (16.3) 76.5 (19.6) 809
347.4 7.2 354.6 29.9 36.6 1,592.1 72.4 0.0 988.6 76.5 (7.6) (34.4) (7.7) 368
246.9 1.8 248.7 16.2 12.8 1,133.5 77.7 18.4 733.4 (6.1) (5.2) 21.9 (5.2) 499
Total reportable segments YTD 2011
Fibertex BioMar Personal Care
Fibertex Nonwovens
External revenue Intra-group revenue Segment revenue Depreciation EBIT Segment assets of which goodwill Equity investments in associates Segment liabilities Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Capital expenditure Average number of employees
1,134.0 0.0 1,134.0 29.9 (7.1) 3,798.4 719.2 0.0 1,814.3 (206.8) (55.9) 205.4 (61.9) 729
309.2 4.1 313.3 27.1 25.7 1,403.2 72.4 0.0 825.2 37.6 (121.2) 82.6 (121.2) 317
24
Fibertex Nonwovens
119.3 0.4 119.7 9.5 (2.8) 686.2 32.0 21.3 397.8 1.4 (3.6) 2.3 (3.6) 362
Grene Hydra-Grene
Martin
Total
144.9 8.4 153.3 2.7 23.5 423.6 0.0 1.7 270.9 8.9 (7.5) 0.7 (7.5) 218
223.3 0.1 223.4 15.4 9.4 811.3 47.0 8.5 633.2 33.3 (10.9) (14.7) (11.1) 517
2,904.1 19.6 2,923.7 109.2 151.6 9,392.1 941.0 28.6 5,885.9 21.2 (69.9) 80.8 (73.5) 3,325
Grene Hydra-Grene
Martin
Total
306.4 0.8 307.2 7.6 14.9 959.0 11.5 0.0 693.9 (26.9) (9.3) 36.7 (9.3) 903
205.5 0.1 205.6 19.1 (9.3) 780.3 47.0 10.4 601.6 (26.0) (6.1) 32.4 (6.4) 626
2,171.6 13.7 2,185.3 95.9 35.9 7,970.9 882.1 33.1 4,529.6 (206.4) (196.6) 355.3 (202.9) 3,123
326.7 2.1 328.8 7.5 17.5 1,070.3 11.5 0.0 765.3 (5.8) (22.4) 30.8 (22.4) 914
97.2 8.3 105.5 2.7 14.5 343.8 0.0 1.4 196.8 14.3 (0.5) (4.1) (0.5) 186
Notes Amounts in DKK million NOTE 1 - Segment reporting (continued) Reconciliation of revenue, profit before tax, assets and liabilities
YTD 2012
YTD 2011
Reconciliation of segment revenue: Revenue from reporting segments Revenue from non-reporting segments Revenue from the parent company Group elimination Group revenue
2,923.7 11.2 4.9 (21.1) 2,918.7
2,185.3 12.1 4.8 (14.8) 2,187.4
Reconciliation of EBIT: EBIT from reporting segments Revenue from non-reporting segments EBIT from the parent company EBIT
151.6 (1.8) (3.2) 146.6
35.9 (1.8) (2.6) 31.5
Reconciliation of segment assets: Assets from reporting segments Revenue from non-reporting segments Assets from the parent company Group elimination Assets
9,392.1 560.6 3,513.7 (3,535.4) 9,931.0
7,970.9 1,080.3 3,861.7 (3,837.8) 9,075.1
Reconciliation of segment liabilities: Liabilities from reporting segments Revenue from non-reporting segments Liabilities from the parent company Group elimination Liabilities
5,885.9 26.3 266.6 (551.3) 5,627.5
4,529.6 29.7 500.1 (436.0) 4,623.4
NOTE 2 - Share based payment Share option programme The company has an incentive programme for the Management and senior managers, including the executive management of subsidiaries. The programme entitles participants to acquire shares in Schouw & Co. at a price based on the officially quoted price at around the time of grant plus a calculated rate of interest (4%) from the date of grant until the date of exercise. Outstanding options Granted in 2008 1) Granted in 2009 Granted in 2010 Granted in 2011 Outstanding options at December 31, 2011 Granted in 2012 Expired (share options granted in 2008) Exercised (from the share options granted in 2009) Outstanding options at March 31, 2012
Management 36,000 36,000 34,000 55,000 161,000
Other 144,000 86,000 148,000 184,000 562,000
Total 180,000 122,000 182,000 239,000 723,000
55,000 -36,000 -12,000 168,000
184,000 -144,000 -42,000 560,000
239,000 -180,000 -54,000 728,000
Strike price in DKK (2) 224.85 78.61 125.53 151.61 155.83
Fair value in DKK Fair value in total Can be exercised Can be exercised per option (3) in DKK millions (3) from to March 2010 March 2012 37.83 6.8 March 2011 March 2013 21.27 4.7 March 2012 March 2014 24.38 4.4 March 2013 March 2015 25.80 6.2 24.24
5.8
March 2014
March 2016
1) The number of options has been adjusted for bonus share issue in 2008 2) At exercise after four years (at the latest possible moment) 3) At the date of grant A total of 54,000 options relating to the 2009 grant were exercised in the first quarter of 2012. The exercise of these options produced cash proceeds to the Group of DKK 4.1 million. The following assumptions were applied in calculating the fair value of outstanding share options at the date of grant: 2012 grant 34.50% 48 mths DKK 3 4.00%
Expected volatility Expected term Dividend per share Risk-free interest rate
2011 grant 33.75% 48 mths DKK 3 3.00%
2010 grant 37.41% 48 mths DKK 3 4.00%
2009 grant 56.54% 48 mths DKK 3 4.00%
The expected volatility is calculated on the basis of 12 months historical volatility based on average prices. If the optionholders have not excercised their share options within the period specified, the share options will lapse without any compensation to the holders. Exercise of the share options is subject to the holders being in continuing employment during the abovementioned periods. If the share option holder leaves the company's employ before the date of acquiring the right, the holder may in some cases have a right to exercise the share options early during a four-week period following Schouw & Co.'s next following profit announcement. In the event of early exercise, the number of share options will be reduced proportionately.
25
Notes Amounts in DKK million
NOTE 3 - Earnings per share (DKK)
Q1 2012
Share of the profit for the period attributable to shareholders of Schouw
77.5
Q1 2011 128.3
YTD 2012 77.5
YTD 2011 128.3
Average number of shares Average number of treasury shares
25,500,000 (2,000,275)
25,500,000 (1,632,726)
25,500,000 (2,000,275)
25,500,000 (1,632,726)
Average number of outstanding shares
23,499,725
23,867,274
23,499,725
23,867,274
Average dilutive effect of outstanding share options Diluted average number of outstanding shares Earnings in Danish kroner per share of DKK 10 Diluted earnings in Danish kroner per share of DKK 10
23,895
64,960
23,895
64,960
23,523,620
23,932,234
23,523,620
23,932,234
3.30 3.29
5.37 5.36
3.30 3.29
5.37 5.36
NOTE 4 - Securities AT MAR. 31, 2012 Financial investments Shares in Vestas (non-current securities) Shares in Lerøy (current securities) Financial investments in total Other securities Securities in total
AT DEC. 31, 2011
AT MAR. 31, 2011
AT DEC. 31, 2010
226.4 92.0 318.4 24.5
248.0 80.5 328.5 27.1
912.8 161.8 1,074.6 29.0
704.4 189.3 893.7 33.2
342.9
355.6
1,103.6
926.9
347.3 0.8 0.1 (3.4) 344.8 (72.6) 0.0 0.0
353.2 0.0 5.5 (11.4) 347.3 383.7 0.1 0.3
353.2 (0.3) 0.1 (4.0) 349.0 383.7 0.0 0.0
353.9 1.8 2.0 (4.5) 353.2 940.4 (0.1) 0.0
Securities measured at fair value: Non-current assets Cost at January 1 Foreign exchange adjustment Additions Disposals Cost at end period Adjustments at January 1 Foreign exchange adjustment Disposals on divestment Adjustments recognised in the income statement for the period Adjustments at end period Carrying amount of non-current assets at end period
(21.7) (94.3)
(456.7) (72.6)
208.3 592.0
(556.6) 383.7
250.5
274.7
941.0
736.9
Current assets Cost at January 1 Foreign exchange adjustment Additions Cost at end period Adjustments at January 1 Foreign exchange adjustment Dividend
160.7 3.1 0.0 163.8 (79.8) (1.2) 0.0
159.8 0.9 0.0 160.7 30.2 (0.1) (9.6)
159.8 0.0 0.0 159.8 30.2 (0.3) 0.0
6.5 5.2 148.1 159.8 (5.8) 0.0 0.0
Adjustments recognised in the income statement for the period Adjustments at end period Carrying amount of current assets at end period
9.6 (71.4)
(100.3) (79.8)
(27.1) 2.8
36.0 30.2
92.4
80.9
162.6
190.0
Carrying amount at end period
342.9
355.6
1,103.6
926.9
At March 31, 2012, the company held 4,000,000 shares in Vestas recognised at a price of DKK 56.60 per share. At DKK 226.4 million, the fair value of the holding corresponded to the market price at March 31, 2012. The original acquisition cost of the shares in Vestas is DKK 313.4 million. At March 31, 2012, the company held 1,000,000 shares in Lerøy recognised at a price of NOK 94.00 per share (DKK 91.97 per share). At DKK 92.0 million, the fair value of the holding corresponded to the market price at March 31, 2012. The original acquisition cost of the shares in Lerøy is DKK 148.1 million. Management regularly monitors changes in the fair value of the company's financial investments. Holdings are recognised at fair value and value adjustments are recognised in the income statement as a financial income or expense. The same method of recognition was applied for the 2011 financial year.
26
Notes Amounts in DKK million
NOTE 5 - Receivables Trade receivables At March 31, 2012 Trade receivables not considered to be impaired Trade receivables individually assessed to be impaired Trade receivables in total Impairment losses on trade receivables Trade receivables net Proportion of the total receivables which is expected to be settled Impairment percentage
Not due 1,847.0 21.7 1,868.7 (5.8) 1,862.9
1-30 days 184.2 30.5 214.7 (11.2) 203.5
Due between 31-90 days 60.8 16.8 77.6 (8.8) 68.8
>91 days 56.9 211.4 268.3 (195.0) 73.3
Total 2,148.9 280.4 2,429.3 (220.8) 2,208.5
0.3%
5.2%
11.3%
72.7%
90.9% 9.1%
Reconciliation to the balance Trade receivables - net Other receivables - current Accruals and deferred income Total current receivables
2,208.5 156.1 21.6 2,386.2
At March 31, 2011 Trade receivables not considered to be impaired Trade receivables individually assessed to be impaired Trade receivables in total Impairment losses on trade receivables Trade receivables net Proportion of the total receivables which is expected to be settled Impairment percentage
Not due 1,299.2 0.2 1,299.4 0.0 1,299.4
1-30 days 121.4 15.5 136.9 (4.3) 132.6
Due between 31-90 days 43.6 14.3 57.9 (4.9) 53.0
>91 days 53.4 236.9 290.3 (214.4) 75.9
Total 1,517.6 266.9 1,784.5 (223.6) 1,560.9
0.0%
3.1%
8.5%
73.9%
87.5% 12.5%
Reconciliation to the balance Trade receivables - net Other receivables - current Accruals and deferred income Total current receivables
1,560.9 157.2 15.6 1,733.7
NOTE 6 - Share capital At March 31, 2012, the share capital consisted of 25,500,000 shares with a nominal value of DKK 10 each. All shares rank equally. Number of shares
Treasury shares
Nominal value
Cost
Percentage of share
January 1, 2011
1,623,275
16,232,750
184.3
6.37%
Movements in Q1 2011 Bought Share option programme Group employee share scheme March 31, 2011
76,000 (70,000) (18,552) 1,610,723
760,000 (700,000) (185,520) 16,107,230
9.8 (6.4) (1.7) 186.0
0.30% -0.27% -0.07% 6.32%
Movements in Q2 - Q4 2011 Bought Share option programme Group employee share scheme December 31, 2011
460,750 (28,000) (35,110) 2,008,363
4,607,500 (280,000) (351,100) 20,083,630
66.4 (2.8) (3.4) 246.2
1.80% -0.11% -0.14% 7.88%
Movements in Q1 2012 Share option programme March 31, 2012
(54,000) 1,954,363
(540,000) 19,543,630
(5.4) 240.8
-0.21% 7.66%
Schouw & Co. has been authorised by the shareholders in general meeting to acquire up to 5,100,000 treasury shares, equal to 20.0% of the share capital. The authorisation is valid until April 1, 2017.
27
Notes Amounts in DKK million
NOTE 7 - Interest-bearing debt At the end of the first quarter of 2012 and 2011 the Group's debt divided by currency was as shown below: March 31, 2012
March 31, 2011
USD 2% Other 3% CZK 6%
CZK 8%
NOK 13%
NOK 13% DKK 30%
MYR 5%
Other 3%
DKK 25%
PLN 4%
MYR 4% PLN 4% EUR 43%
EUR 37%
The average effective rate of interest was 3.2% at March 31, 2012 (March 31, 2011: 3.2%).
NOTE 8 - Related party transactions Under Danish legislation, Givesco A/S, Svinget 24, DK-7323 Give, members of the Board of Directors, the Management Board and senior management as well as their family members are considered to be related parties. Related parties also comprise companies in which the individuals mentioned above have material interests. Related parties also comprise subsidiaries and associates, in which Schouw & Co. has a controlling influence, as well as members of the Board of Directors, Management Board and senior management in our subsidiaries and associates. The management share option programmes are described in note 2. The Group has in 2012 granted Incuba A/S an additional loan of DKK 0.7 million, and the Group now has a total receivable of DKK 11.2 million. At the same time last year the Group had a total receivable of DKK 10.8 million. The Group has received management fee of DKK 15 thousand (2011: DKK 25 thousand) and received interests of DKK 221 thousand (2011: DKK 187 thousand) from Incuba A/S. Other than that there were no other related party transactions.
28