The Schouw & Co. Group had a good year in 2014. The Group's companies improved overall revenue slightly from DKK 11,645 million in 2013 to DKK 11,784 million in 2014. The revenue performance was strongly affected by lower raw materials prices, especially in BioMar, which reported lower revenue despite an increase in overall business activity. The other consolidated businesses all reported revenue improvements. EBIT for the year rose to DKK 708 million in 2014 from DKK 685 million in 2013, which figure in Q4 included a DKK 54 million profit from the sale of a property. The 12% operational EBIT improvement was driven mainly by BioMar and Fibertex Nonwovens, but Hydra-Grene and, to a lesser extent, Fibertex Nonwovens also contributed. A drop in provisions for trade receivables in BioMar supported the profit for the year, in part because a specific payment received at the end of January 2015 reduced the estimated provisioning need by DKK 13 million.
Highlights
2014
- Revenue rose to DKK 11.8 billion. (2013: 11.6).
- EBIT increased to DKK 708 million (2013: 685), which was much higher than expected at the start of the year. EBIT was DKK 13 million higher than our recent guidance, due to an unexpected payment on an impaired receivable.
- Each of our portfolio companies increased their business activity, and they all reported EBIT improvements.
- Our portfolio companies made two small acquisitions in 2014. Fibertex Nonwovens now has a platform for growth in the United States, and Fibertex Personal Care took full ownership of a printing business in Germany.
- Cash flows from operating activities were DKK 628 million (2013: 667) with a free cash flow of DKK 273 million.
- Our net interest-bearing debt remains at close to zero.
- Our ROIC improved for the fifth consecutive year, reaching 16.9%, excluding goodwill and 14.0% when stated including goodwill.
2015
- Several of our businesses continue to operate in highly competitive markets, but earnings are expected to remain attractive.
- We expect 2015 revenue to be around DKK 12 billion (2014: 11.8) and EBIT to be in the range of DKK 610-700 million (2014: 708).
- The share of profit in associates etc. is expected to be DKK 60-70 million after tax. ¡ Dividend raised by 33% to DKK 8 per share.
BioMar
- Volumes sold were up on 2013, but revenue fell 3% primarily due to lower raw materials prices. EBIT rose to DKK 434 million (2013: 394) mainly due to strong efficiency in all regions and lower provisions. Markets remain very competitive and market conditions uncertain. 2015 EBIT expected to fall relative to 2014.
Fibertex Personal Care
- Revenue up by 15% and EBIT improved to DKK 171 million (2013: 164). EBIT under pressure due to global excess capacity, but 2015 EBIT expected to be in line with 2014 figure.
Fibertex Nonwovens
- Revenue up by 12% and EBIT up by 67% to DKK 62 million in 2014. The year 2015 will be a year of transition, with the focus on integrating acquisitions and installing new capacity, but moderate EBIT improvement is still expected.
Hydra-Grene
- Revenue at an all-time high driven by strong activity in wind turbine segment. EBIT up by 30% to DKK 60 million, but guidance for 2015 toned down.
Kramp (20% owned)
- The first full year after the Grene-Kramp merger saw revenue up by 7% to DKK 4.9 billion despite moderate activity in the second half. EBIT rose to DKK 405 million (2013: 349) and is expected to continue to improve in 2015.
Statement by Jens Bjerg Sørensen, President of Schouw & Co.:
“Schouw & Co. had a very good year in 2014. Our portfolio companies performed well throughout the year and in fact better than we had originally expected. We grew our comparable EBIT by 12% relative to 2013, net of the non-recurring gain from the sale of a property in that year. The improvements were broadly based, and all our companies contributed to the positive performance. Our key focus in 2014 was to continue to help our businesses grow bigger and stronger. We planned and made substantial investments, and we successfully completed two minor acquisitions. Fibertex Nonwovens acquired a company in the United States that will give it an attractive platform for growth in North America, and Fibertex Personal Care took full ownership of a printing business in Germany and can now offer its customers more specialised and value-creating products. Growth, investment and acquisitions for our existing businesses will continue to be on our agenda in 2015, but this will not be a year without challenges. Several of our markets are extremely competitive, and our companies are constantly experiencing changes in their value chains. However, I am confident that Schouw & Co. will once again achieve satisfactory results in 2015.”
Conference call
Schouw & Co. will be hosting a teleconference (in Danish) for analysts, the media, etc. on Friday, March 6, at 10.00 CET. Those wishing to attend the teleconference are invited to call tel. +45 32 71 47 68 using pin 87381765#. An accompanying presentation can be downloaded from www.schouw.dk.
