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Schouw & Co. Capital Markets Day Langelinie Pavillonen, 15 June 2017 Schouw & Co. CMD 15.06.2017 2 Agenda Speakers Jens Bjerg Srensen President Schouw & Co. The strategic mindset in Schouw & Co. 09:00 Insights from


  1. Schouw & Co. Capital Markets Day Langelinie Pavillonen, 15 June 2017

  2. Schouw & Co. CMD 15.06.2017 2 Agenda Speakers Jens Bjerg Sørensen President Schouw & Co. ▪ The strategic mindset in Schouw & Co. 09:00 ▪ Insights from the acquisition of Borg Automotive ▪ General status and update on recent developments Carlos Diaz CEO BioMar ▪ Highlights from BioMar’s strategy 09:45 ▪ Market insights and business update ▪ Entrance into shrimp feed with Alimentsa acquisition Bo Lybæk CEO GPV ▪ Status after the first year of Schouw & Co. ownership 11:15 ▪ Establishment in Mexico ▪ Growth agenda, including recent BHE acquisition 12:00 Lunch

  3. Agenda Schouw & Co. strategic mindset Borg Automotive General update

  4. Schouw & Co. CMD 15.06.2017 4 Our value proposition Diversified portfolio 1 25 25 6,5 ,500 2 Leading B2B businesses 2 countries with employees major long-term production shareholders Active/long-term ownership 3 Europe based, global outlook 4 ROIC focused 5 Financially strong 6

  5. VISION We strive to be among the best in creating value in a proper and trustworthy manner

  6. Schouw & Co. CMD 15.06.2017 6 Our modus operandi is active ownership DIVERSIFIED FUTURE- ACTIVE AND PORTFOLIO PROFITABLE PROOFING DEVELOPING GROWTH OWNERSHIP ACTIVE STRATEGY OWNERSHIP WHEEL MODEL FINANCIAL OPENNESS VERSATILITY EFFICIENT USE OF CAPITAL

  7. Schouw & Co. CMD 15.06.2017 7 Active ownership: the transformation of Fibertex 2001 2002-2009 2010 2011-  Fibertex, then  Green-field  Fibertex de-  Continued expansion in Asia partly owned by expansion in Malaysia merged into two  5 lines in Malaysia – 8 lines in total EAC, was seeking a for hygiene products  Technological upgrade in Denmark long-term owner  Total investments DKK ~2bn willing to invest in  Acquisition and  Strict focus on innovation growth construction of a new  Establish print business in Germany factory in the Czech  Schouw & Co. Republic  Investment plan ‘capturing the future’ acquired the shares  Relocation of 200 jobs in the combined  Acquisitions in France, US, South Africa Fibertex business at  Turned around from loss to profit DKK 350m  State-of-the-art equipment at all sites  Leading position in most segments Revenue Total revenue (2017) DKK 600m DKK ~3.4bn CAGR 11%

  8. Schouw & Co. CMD 15.06.2017 8 HydraSpecma update Hydra-Grene before acquiring Specma Specma acquired Strategic rationale early 2016 ▪ Small but highly profitable Strong in ▪ A leading Nordic ▪ Highly complementing ▪ Revenue of DKK ~550m and +10% EBIT hydraulics and fluid customer segments Denmark ▪ Two segments; Danish OEM and global conveyance application and in wind ▪ Broad geographical wind turbine manufacturers provider presence ▪ Revenue of DKK +1bn, ▪ Exposure to many ▪ Sub-supplier margins under pressure significantly bigger Wind industrial segments M&A than the ‘old’ Hydra industry ▪ Low visibility in wind turbine industry ▪ Strong platform for required ▪ Unique match between growing ▪ Wind industry volatile and project based future growth products, competences ▪ Economies of scale and knowhow ▪ Wish to reduce high exposure to wind ▪ Synergies primarily Strategic ▪ Acquired at 8.2x within sourcing and EBITDA before ambition ▪ Broadening geographical presence cross-selling synergies to grow ▪ Ambition of reaching DKK 1bn in revenue opportunities Status 17 months after the transaction ▪ Harvesting of sourcing synergies is encouraging ▪ In general, everything has developed as expected ▪ Cross sales and more ‘traditional’ integration up next ▪ Soft demands in some areas, especially marine and mining ▪ New (Danish) CEO in Specma from 2018 ▪ Solid progress in Specma’s transformation and relocation

  9. Schouw & Co. CMD 15.06.2017 9 Strategic goals GROWTH PROFIT RETURN GEARING PAYOUT PORTFOLIO Considerable Benchmark ROIC > 15% Investment Constant or 5-7 big growth every level (dependent on risk) grade capital increasing and strong year profitability structure dividends businesses

  10. Schouw & Co. CMD 15.06.2017 10 The strategic journey of Schouw & Co. Bigger and Bigger and Consolidating Diversification stronger stronger the Go Strong portfolio businesses conglomerate Revenue Revenue Revenue Revenue Revenue Target rev. 0.3bn 2.2bn 7.4bn 11.7bn 14.4bn +20bn 2001 2006 2013 2016 2020 1988 x65

  11. Schouw & Co. CMD 15.06.2017 11 2020 Strategic ambition Scenario GO strong January 2017 revised 2020 ambition Revenue EBIT ROIC DKK +20bn DKK 1.xbn >15% Make required CAPEX investments (for organic growth) Investments DKK 2-3bn ( ✓ ) Complete x M&A bolt-on acquisitions DKK x bn ✓ Expand the portfolio with one new business DKK 1.0-1.5bn

  12. Schouw & Co. CMD 15.06.2017 12 M&A Innovation Fit for future Operational excellence Digitalisation CAPEX SCHOUW’S CITY OF STRATEGY Enablers

  13. Agenda Schouw & Co. strategic mindset Borg Automotive General update

  14. Schouw & Co. CMD 15.06.2017 14 Ownership Ownership Ownership Ownership since Ownership Ownership since 2006 since 2001 since 2001 1988/2016 since 2016 since 2017 R E S U L T S A R E C R E A T E D B Y P E O P L E

  15. Schouw & Co. CMD 15.06.2017 15 Borg Automotive, a leading remanufacturing company Borg Automotive at a glance Product split and life cycle 100% ▪ Borg Automotive is a remanufacturing company 3% 6% 7% founded in 1979 by Søren Toft-Jensen 34% ▪ The company specialises in the production and sales of remanufactured parts for the automotive 50% industry like alternators, starters, brake calipers ▪ Borg is Europe's leading independent auto All products remanufacturer with broadest product range and sales in almost all European countries EGR Starters & Brake Steering AC com- ▪ Customers (+100) are wholesalers, distributors valves alternators calipers pressors and OES/OEMs; largest ~10% of sales ▪ Headquarter in Silkeborg with production sites in sales Starters/ New products Air-conditioning Steering/brake Poland and UK, and a R&D facility in Belgium alternators Electrical parts, EGR, Growing segment as Used in all cars. Only in fuel-driven ▪ Production volume ~2m cores valves, turbo, kinetic most new cars have Remanufacturing engines. At least 15 ▪ FTE s: ~1,400 harvesters are small AC penetration increases years before market today but growing diminishes ▪ Annual sales : DKK ~1bn with EBIT DKK 150-160m ▪ CAGR 2012-2016 ~11% time

  16. Schouw & Co. CMD 15.06.2017 16 Remanufacturing in Europe to grow ~8% European remanufacturing drivers European auto remanufacturing market EUR billion 1 Growing carpark 2.3% annual car park Forecast & new sales growth towards 2020 2 ~8% 11.6 Longer vehicle +1 year in average life- 10.8 lifetime time since 2010 10.1 9.4 ~7% 3 8.7 Declining num- 1% annual reduction in 8.0 7.4 ber of accidents accidents since 2010 7.0 6.5 4 Structural Growing aftermarket change liberalisation via regul. 5 Maturing reman. Drives industry promo- capabilities tion/knowledge sharing 6 Global green Supply concern ‘critical’ 2012 2013 2014 2015 2016 2017 2018 2019 2020 agenda to EU (focus on CO2) 1 Notes: 1) The remanufacturing of automotive components yields some 88% materials savings compared to using a new product, with an associated 53% decrease in CO2 emitted and 56% lower energy requirement (EU Commission, 2015)

  17. Schouw & Co. CMD 15.06.2017 17 The remanufacturing process

  18. Schouw & Co. CMD 15.06.2017 18 The remanufacturing process

  19. Schouw & Co. CMD 15.06.2017 19 Acquisition makes good business sense Rationale, conglomerate level Rationale, business level ▪ Current capital structure provides room for significant ▪ Borg Automotive fulfils all investment criteria investment on top of current investment programs ▪ Leading position – leading position in Europe ▪ Span of control target of 5-7 businesses enables new value ▪ B2B – processing of remanufacturing auto parts servicing enhancing platform investments global wholesalers, buying groups and OES/OEMs ▪ Internationally focused – sales throughout Europe with ▪ Continue value-creation of the conglomerate by pursuing production in Poland and UK attractive buy-and-build opportunities ▪ Strong management – highly skilled management team ▪ A new platform investment is key in ‘the next step’ of willing to step-change the company Schouw & Co. ▪ Active ownership – significant opportunity for transformation through active ownership 2016 Revenue (DKKm) ▪ Borg Automotive is well-run and among the best-in-class 2016 EBIT (DKKm) to deliver growth and profitability 8.867 ▪ Well positioned with solid presence in attractive markets 1.792 1.747 and all major product categories 1.301 ~900 * 877 ▪ Industry growth of ~8% is unique 581 246 ▪ Significant opportunities to drive further growth in a ~125 * 111 81 61 fragmented industry, organically and through M&A Notes: *) Borg Automotive’ s accounting principles will be changed following the acquisition to adapt to IFRS. Pro-forma FY2016 revenue and EBIT before any effect of PPA

  20. Agenda Schouw & Co. strategic mindset Borg Automotive General update

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