Schouw & Co. shareholder magazine 2011

www.schouw.dk

Shareholder magazine 2011Aktieselskabet Schouw & Co.

Key figures

FibertexPersonalCare

BioMar

p. 6 p. 8 p. 10 p. 12 p. 14 p. 16

FibertexNonwovens

Grene Hydra-Grene

Martin

2

income statement and BaLance 2011 2010 2009 2008 2007

Revenue 11,929 9,451 8,440 9,821 8,150

Operating profit before depreciations (EBITDA) 1.049 753 588 757 764

EBITDA margin 8.8% 8.0% 7.0% 7.7% 9.4%

Operating profit (EBIT) 646 369 190 124 439

EBIT-margin 5.4% 3.9% 2.3% 1.3% 5.4%

Associates etc. -24 1 -11 25 -3

Fair value adjustments of financial investments -556 -518 41 -872 1,467

Other net financials -107 -92 -118 -144 -136

Profit/(loss) before tax -41 -241 102 -865 1,766

Tax on the profit/(loss) for the year -31 115 -29 -38 -102

Profit for the year from discontinuing operations 0 167 78 0 20

Profit/(loss) for the year -72 40 151 -903 1,683

Total equity 4,230 4,395 4,753 4,635 5,642

Net interest-bearing debt (NIBD) 2,745 2,166 2,281 2,996 2,641

Total assets 9,901 8,900 9,659 10,153 10,316

the financial ratios 2011 2010 2009 2008 2007

Average number of employees 3,287 3,166 3,334 3,743 3,541

NIBD/EBITDA 2.62 2.88 3.88 3.96 3.46

Dividend per share 4,00 3,00 3,00 3,00 3,00

Net asset value per share 178.62 183.93 177.15 168.25 215.42

Share price at year end 92.50 133.50 94.45 76.21 220.70

Price/net asset value 0.52 0.73 0.53 0.45 1.02

Return on invested capital (ROIC) 13.8% 9.8% 5.8% 7.3% 10.4%

This publication is a translation of the Danish shareholder magazine 2011.The original Danish text shall be controlling for all purposes, and in cases of discrepancy, the Danish wording shall be applicable.

Schouw & Co. had a good year and delivered solid improvements in 2011. I am very pleased to report that our portfolio companies reported strong operational performances and, for the first time in the history of our company, we generated EBITDA of more than DKK 1 billion.

Over the past few years, our companies have all made a dedicated commitment to growing their businesses and strengthening their market positions. It is very encouraging to see the results of the large investments made and the hard work that our managements and our many employees have put into making this happen.

At Schouw & Co., we are focused on three key issues: profitable growth, efficient use of capital and being primed for the future. If you are not focused on all three of these components, you will not create a profitable business in the long term.

One of our core values is to make sure that we never forget how important every single penny is when determining selling prices, in procurement and in every single business process. In 2011, that approach helped us lift our profitability by a substantial margin.

Our businesses have strengthened their strategic foundations and adapted their cost base,

PresidentJens Bjerg Sørensen

Major operational improvements

and they now stand well prepared to continue to prosper. However, the state of the global economy has made us extra cautious, and we are ready to act swiftly and firmly if things do not develop as we expect.

Schouw & Co. expects to generate a substantial cash flow over the next few years. That gives us a comfortable position from which to capitalise on any opportunities that may arise in our markets.

We expect 2012 to be yet another year of prosperous developments and growing earnings for Schouw & Co.

President Jens Bjerg Sørensen

As a financially and environmentally responsible business, Schouw & Co. will not print and distribute a conventional annual report in 2012. This year, we have pre-pared this shareholder magazine containing only very general financial information and management’s report and should be read in conjunction with our actual annual report. The 2011 Annual Report is available in electronic format at www.schouw.dk. The shareholder magazine highlights our businesses and the opportunities and challenges they face. It is our hope that it will be a helpful way of getting a good impression and understanding of our portfolio and the very attractive businesses that we constantly work to develop and optimise.

3

Growth in revenue and operating profit – 2011 a good year

Financial performanceOverall, 2011 was a good year for the companies of the Schouw & Co. Group. Although we did face a number of challenges during the year, they were generally dealt with in a satisfactory manner, ena-bling the Group to improve consolidated revenue by 26% from DKK 9,451 million in 2010 to DKK 11,929 million in 2011. EBIT surged by a full 75% from DKK 369 million in 2010 to DKK 646 million in 2011.

The large revenue improvement shows that most of the Group’s operations are not directly ex-posed to the general economic slump. The Schouw & Co. businesses have managed to align costs, capacity and focal areas with market demand, thereby creating a platform from which to restore growth.

The main contributors to the revenue improve-ment were BioMar, backed especially by improved volume sales in Norway and Chile , and Fibertex Nonwovens through the acquisition of French company Tharreau Industries. The other wholly owned companies, Fibertex Personal Care, Grene, Hydra-Grene and Martin also reported improve-ments in 2011.

In terms of earnings, BioMar was also the main contributor, ahead of Martin which reversed the

negative earnings from 2010 and reported an EBIT profit for 2011. All of the other wholly owned subsidiaries also reported improvements with the exception of Fibertex Personal Care recording a minor setback.

Consolidated EBIT was substantially better than the guidance announced during the course of the year, and the improvement over 2010 is considered to be very satisfactory.

The loss from associates for the year, which was mainly the result of Incuba’s loss on its venture activities, proved to be worse than anticipated at the beginning of the year.

Finally, the significant unrealised value adjust-ment on the Group’s financial investments, which had a negative impact on net financials, were of course not satisfactory.

Group developmentsThe Schouw & Co. Group had a busy year in 2011. At the beginning of the year, the two main business areas of Fibertex demerged; Fibertex Personal Care and Fibertex Nonwovens became separate businesses in a move intended for both of them to continue to pursue their potential.

Shortly afterwards, in March 2011, Fibertex Non-

Revenue growth

26%

EBIT growth

75%

Net interest-bearing debt/EBITDA

2.6x

Dividend up by 1 DKK per share

4 DKK

4

Growth in revenue and operating profit – 2011 a good year

wovens agreed to acquire 85% of the shares in the French nonwovens manufacturer Tharreau Indus-tries. That ownerhip interest has subsequently grown to almost 90%, and effective January 1, 2012, the company changed its name to Fibertex Nonwovens.

The Group completed two major production capacity projects in 2011; at BioMar in Norway and at Fibertex Personal Care in Malaysia. Both project were completed as planned and began operations in 2011.

After the end of 2011, Grene demerged its activ-ites in Poland into two units, one for wholesale and the other focused on retail business.

In addition, all of our businesses launched initia-tives on a smaller scale in 2011 aimed at creating profitable growth.

OutlookOverall, the companies of the Schouw & Co. Group performed well during 2011, reporting substantial improvements in both revenue and EBIT.

Our businesses have maintained good com-petitive strength. Adjustments have been made in preparation for the expected market conditions, and a host of business initiatives have been taken that can provide a foundation for profitable growth.

We monitor very closely the economic turbu-lence currently affecting a large number of markets, especially in Europe. Some of our businesses are very sensitive to the situation while others are more robust.

All of the Group’s businesses expect to improve their revenue in 2012, although not at the rates recorded in 2011. BioMar, Fibertex Nonwovens and Martin expect to improve their EBIT in 2012, while Fibertex Personal Care, Grene and Hydra-Grene each expect to maintain the attractive level of 2011.

Overall, Schouw & Co. expects to generate consolidated revenue in the range of DKK 12.5–13.0 billion in 2012. The revenue may change quite sub-stantially due to changes in raw materials prices, without necessarily having any notable effect on profit.

Schouw & Co. applies a profit forecast range for each individual business. Aggregating the individual company profit forecasts leads to consolidated guidance for 2012 of EBIT in the range of DKK 660-740 million, which implies another improvement on top of the substantial increase of 2011.

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

DividendThe Board of Directors recommends that the shareholders approve a DKK 1 increase in the dividend for 2011 to DKK 4 per share. That equals to total dividend payments of DKK 102 million.

FoRecast 2012 actuaL 2011 DKK million Revenue EBIT Revenue EBIT

BioMar c. 7,500 360-380 7,269 362

Fibertex Personal Care 1,500-1,600 145-155 1,314 148

Fibertex Nonwovens c. 900 15-25 726 -7

Grene c. 1,400 80-90 1,307 87

Hydra-Grene c. 500 60-70 465 69

Martin c. 875 20-30 855 2

Others (incl. eliminations) c. 25 -10-20 -7 -15

Schouw & Co. 12,500-13,000 660-740 11,929 646

5

BioM

ar

Revenue (DKKm)

’07 ’08 ’09 ’10 ’11

3,67

7

5,32

1

4,85

4 5,41

9

7,26

9

6

BioMar manufactures quality feed for the aquacul-ture industry, i.e. industrialised fish farming in fresh and salt water in many parts of the world. BioMar mainly manufactures feed for salmon and trout in Norway, Scotland and Chile, although almost a quarter of revenue is generated from sea bass and sea bream in the Mediterranean and from rainbow trout, eel and other species in Danish and northern European fish farms.

BioMar has a market share of around 25% of the large salmon markets in Norway and Chile and combined with a very strong position in Europe, this makes BioMar the world’s third-largest manufac-turer of quality feed for industrialised fish farming.

In recent years, BioMar has seen consistent growth in revenue as well as in earnings. In 2011, the company doubled the capacity at one of the two factories in Norway, which means that BioMar has sufficient capacity to continue expanding produc-tion in the years ahead.

AquacultureWithin the past 50 years, modern fish farming has grown to become a huge global industry and Nor-way alone produces more than 1 million tonnes of salmon. The reason is simple – the global popula-tion is rising and since it is not possible to catch more fish in the sea, farming is the only sustainable way of increasing the production of fish.

Due to their high content of Omega 3 fatty acids, fish – and especially the fatty species such

Aquaculture is growing globally – and BioMar with it

Torben Svejgård,CEO, BioMar

as salmon – are very healthy and very popular and the demand for fish is growing in line with the general increase in standards of living.

Fish farming is a very efficient way of producing food. Fish are cold-blooded and are almost weight-less in the water, which means that they use most of their energy to grow. For this reason, it takes only a little more than one kilo of feed for a salmon to grow by one kilo. And as salmon contains relatively few bones and fins, the amount of edible meat is relatively high compared to the feed used.

A good investment for Schouw & Co.Schouw & Co. acquired 69% of BioMar in 2005 and achieved full ownership in 2008 by merging the parent company BioMar into Schouw & Co.

Even though the Chilean salmon industry was hit by a serious outbreak of disease in 2008, which halved Atlantic salmon stocks and set back the industry by several years, the acquisition of BioMar has made Schouw & Co. both larger and stronger. Today, Schouw & Co. generates more than half of its revenue and earnings from BioMar and BioMar’s performance has been crucial to Schouw & Co.

This year, BioMar will invest heavily in innova-tion, among other things to establish a global R&D function. This is expected to boost BioMar’s competitiveness and contribute significantly to the establishment of new business areas within new species and on new markets.

Going forward, BioMar will focus increasingly on achieving growth in new species and geographi-cal markets and prospects are good for continuing growth and increasing earnings.

During 2012, BioMar will complete the con-struction of a factory in Costa Rica for the produc-tion of feed to the tilapia species. On a global scale, tilapia farming exceeds salmon farming but until now, there has been no sufficient demand for qual-ity feed produced with emphasis on food safety, traceability in raw materials, advanced production technology and ongoing research and development has not been profitable.

DKK million 2011 2010 Revenue 7,269 5,419

Operating profit (EBIT) 362 200

EBIT margin 5.0% 3.7%

Profit before tax 225 201

Average number of employees 761 709

Total assets 4,061 3,479

Equity 1,569 1,636

Net interest-bearing debt 552 239

ROIC 22.1% 15.7%

7

Fib

ertexP

ersona

l Ca

re

Boom in the use of disposable nappies – in South East Asia

Fibertex Personal Care produces a number of mate-rials applied in nappies and other disposable prod-ucts for personal hygiene. The company has produc-tion facilities in Denmark and Malaysia and a top three position in both Europe and South East Asia. On a global scale, the company has a market share of about 8%, making it the fifth largest producer of spunbond products for the hygiene industry.

The materials are textiles produced from fibres based on the oil-based plastic granulate polypropyl-ene, which is a biodegradable material leaving no hazardous substances in the environment.

The materials are produced in an integrated process where the plastic granulate is extruded to a thin film on a wide (4 m) high-speed belt. Fibertex Personal Care has most recently finalised the in-stallation of its sixth production line and is now ca-pable of producing a total of 16,000 sqm. of textile per minute. This means that it would actually only take a little over four months to cover the Danish island Funen entirely with the materials produced by the company!

Trust and good relationsFibertex Personal Care’s customers are major international producers of nappies and other hygiene products. Customers include Procter & Gamble (Pamper’s nappies and Always sanitary towels), SCA (Libero and Libresse), Kimberly Clark (Huggies) as well as a large number of producers of other brands and private labels.

All of these customers require uniform materi-als of the highest quality. Even the slightest rough-ness would render the material unfit for use, and it would have very serious consequences if, say, a fly were found in a baby’s nappy.

It is crucial that Fibertex Personal Care has good, professional customer relations. This is achieved through extensive development efforts where the company continuously strives to optimise its products in collaboration with its customers. Current efforts include developing softer products, to enhance skin-comfort and produce more light-

weight and thinner materials while also improving their ability to conduct and encapsulate liquids.

Good customer relations are reflected in a num-ber of awards and distinctions such as the “Excel-lence Award” granted to Fibertex Personal Care in three out of the past four years. This award is only granted to one per thousand of Procter & Gamble’s more than 80,000 suppliers.

A permanent and growing marketGlobally, the spunbound market is growing, and on average demand has increased by more than 10% in Asia over recent years. Increased wealth and higher standards of living brings more attention to personal hygiene and more the demand for dispos-able nappies and sanitary towels; on a global scale, about one in four of all babies use disposable nap-pies. Market penetration in Europe and the USA is strong, but in a country like India it is below 5% and even lower in Africa.

At one and the same time, high growth is an attraction and a risk in relation to Schouw & Co.’s investment in Fibertex Personal Care. World-wide, several new production lines have been announced, which may result in short-term price pressures due to the imbalance between supply and demand.

On the other hand, Fibertex Personal Care ope-rates in one of the most stable and non-cyclical markets available and that the company is well positioned to pursue the significant growth seen in South East Asia.






Total assets 1,555 1,296

Equity 634 530


ROIC 13.7% 18.2%

Mikael Staal Axelsen, CEO, Fibertex Personal Care

8

Boom in the use of disposable nappies – in South East Asia

Revenue (DKKm)

1,00

8 1,09

0

935

1,23

7 1,31

4

’07 ’08 ’09 ’10 ’11

9

Fib

ertexN

onw

ovens

Revenue (DKKm)

583

500

415

413

726

’07 ’08 ’09 ’10 ’11

10

Europe’s leader in nonwovens – for industry use

Fibertex Nonwovens manufactures nonwovens for many different applications. The company’s key market is Europe, and it has production facilities in Denmark, the Czech Republic and France. Fibertex Nonwovens also has an ownership interest in a nonwovens manufacturer in South Africa supplying products to markets in the southern part of Africa.

The company’s products are used for many different purposes and in many different industries, primarily the automotive, building and the furniture and bedding industries, but also for niche applica-tions within health care, for filtration purposes and as auxiliary materials for the manufacture of com-posites for, among other things, wind turbine blades.

Many of Fibertex Nonwovens’ customers have been severely affected by the economic down-turn in Europe and significant raw materials price increases. This has had a negative impact on Fiber-tex Nonwovens’ performance in recent years.

Since 2007, Schouw & Co. has invested a triple digit of millions in technology upgrades at the company’s production facilities and to relocate much of the labour-intensive production to the Czech Republic. Therefore, Fibertex Nonwovens has a very strong position, with state-of-the art and efficient production equipment and highly competitive production in eastern Europe.

Strengthened position through acquisitionIn spring 2011, Fibertex Nonwovens acquired the French company Tharreau Industries, which is the leading nonwovens manufacturer in Europe for the automotive industry. Tharreau has very strong connections to the French automotive industry and is capable of manufacturing a number of products with special impregnated surfaces, significantly improving customers’ production economy and thus making the products very competitive.

The products for the automotive industry can replace traditional textiles or be used as con-struction elements for cars, because not only are nonwovens cheaper, they are typically also more lightweight products than the alternatives and

thus contribute to improving car fuel economy. Moreover, nonwovens may have noise-reducing and acoustics-improving properties in cars and may offer better comfort in, for example, car seats.

On average, 30 sqm. of nonwovens is used for a car in more than 37 different places, mainly for ceilings, hat shelves, doors and panels, but it may also be used as insulation and soundproofing in engine compartments and wheel housings.

Basis for success and growthFibertex Nonwovens has a strong position in a number of areas with significant growth perspec-tives. Apart from the considerable growth in global demand for products for the automotive industry, the company expects to see a range of major in-frastructure projects and construction works take large amounts of geotextiles in the coming years both in Europe and in the global growth markets.

By developing innovative products, Fibertex Nonwovens aims to increase future earnings from high-value products that meet customer demands in new ways and offer enhanced end product qua-lities. Using nanofibres might provide unique solu-tions for filtration purposes or post-processing and impregnation of materials with a view to upgrading and improving casting processes.

Schouw & Co. strongly believes in a profitable future for Fibertex Nonwovens, and with the acqui-sition of Tharreau the company is positioned as a future leading player in the industry.

DKK million 2011 2010 Revenue 726 413

Operating profit (EBIT) -7 -16

EBIT margin -1.0% -3.9%

Profit before tax -26 -30


Total assets 1,058 633

Equity 356 259


ROIC neg. neg.

Jørgen Bech Madsen, CEO, Fibertex Nonwovens

11

Gren

e

One-stop farming – in the Nordics, Poland and Russia

Grene is a trading and logistics company that carries and sells products to the agricultural and industrial sectors in the Nordic region, Poland and Russia. Grene began as a wholesaler of spare parts and accessories in 1915 and this was the first company that Schouw & Co. acquired when in 1988, it decided to build a conglomerate.

The primary customer group is the agricultural sector, but around 20% of revenue is generated from industrial customers, mainly in Denmark. In this market, the company trades in electrical and mechanical products and provides service for elec-tric motors. Among other things, Grene has built up a strong niche position as a supplier of equipment and services to the global wind turbine industry.

Agricultural expansion to the eastGrene serves the Nordic agricultural sector with day-to-day deliveries from central warehouses in Den-mark and Sweden. The Polish and Russian markets are served from independent warehouses that carry product assortments adapted to local demand.

Grene’s agricultural customers in the Nordic region mainly comprise tractor and machinery dealerships and Grene supplies a complete range of components and spare parts to supplement the dealerships’ machines. Farmers can buy goods at the store or buy them from Grene’s online solution, which contains more than 200,000 items for next-day delivery.

In Poland, Grene operates 90 stores with own brands, but it also sells goods to dealers and directly to large farms. As opposed to the Danish agricultural sector, the agricultural sectors of eastern and central Europe are growing. Grene is the leading player in Poland and in recent years, it has also established a promising platform in Russia.

Grene’s strong position provides a good basis for further expansion in eastern and central Europe in the longer term. A country like Ukraine, which may have the best and most nutritious farm land in the world, but also other countries offer a potential for further expansion of the activities, considering Grene’s experience from eastern European.

Many years of good performanceGrene has developed strongly during the almost 25 years it has been under Schouw & Co. owner-ship. From being a local Danish wholesaler, the company now has most of its operations outside Denmark, the warehouses have been largely auto-mated and goods are processed much faster and much more efficiently than before.

In the future, Grene will continue to invest in countries that are seeing growth and industrialisa-tion in their agricultural sectors, but the size and efficiency of the logistics systems are crucial for profitability in a wholesale business. For this rea-son, Grene will continue to expand and strengthen its current market positions. This will be done by constantly optimising the product range, adding new product groups, agencies and distribution agreements and by investing in efficient IT and logistics systems.

Schouw & Co.’s investment in Grene has been very profitable. The Grene activities were acquired in 1988 for some DKK 50 million. Since then, Schouw & Co. has received almost DKK 125 million in dividends and with the previous years’ positive performance and bright future prospects, Grene is today a very valuable part of Schouw & Co.






Total assets 931 858

Equity 285 256


ROIC 12.5% 7.3%

Carsten Thygesen,CEO, Grene

12

Revenue (DKKm)

1,18

5 1,30

7

1,14

0 1,23

7

1,30

7

’07 ’08 ’09 ’10 ’11

13

Hyd

ra-G

rene

Revenue (DKKm)

’07 ’08 ’09 ’10 ’11

440

531

417

391

465

14

Hydraulics to Denmark – and to the world

Hydra-Grene manufactures and trades in hydraulic components and solutions to the Danish industrial sector and to the global wind turbine industry. Year after year, Hydra-Grene has achieved impressive results and the company holds a leading position in Denmark in its niche markets.

From agricultural machinery to wind turbinesIn close collaboration with its customers, Hydra-Grene develops hydraulic components to a wide range of sectors and customers. Around half of revenue is generated from the wind turbine indus-try but solutions involving agricultural machinery, lifting equipment, cranes, transportation and production equipment and winches to the fishing industry also contribute to revenue.

Hydra-Grene’s product range covers more than 40,000 items, including hydraulic hoses, nipples, fittings, pump units, pressure and control valves and filters. Advisory services and problem-shoot-ing are not items listed in the product catalogue, but the company’s involvement in its customers’ challenges and in the design and production phase is key to Hydra-Grene’s continued strong perfor-mance.

Global growth – and small nichesThe part of Hydra-Grene serving the industrial OEM and aftermarket is mainly focused on the Danish market. Hydra-Grene has managed to maintain a very strong position in niches that still have a future in Denmark in the long term, despite the general pressure from products made in China and eastern Europe. Future growth in the tradi-tional industriy sector will be based on maintaining competitive prices and a high level of skills, as well as strong and long-term customer relations.

The wind sector offers huge global, long-term growth perspectives that are of an entirely differ-ent scale when compared with Danish industrial production. Even if the wind turbine industry was generally under pressure in 2011 and may continue to be challenged in the short term, the long-term

growth perspectives remain tremendous. It may well be that growth in installed wind turbine capac-ity will not continue to be double-digit, but even at lower growth rates Hydra-Grene will be able to continue to develop profitably.

For this purpose, Hydra-Grene has in recent years focused on and expanded its business exposure to the wind turbine industry. Investments have been made in quality control systems and an international platform has been established with activities in China, India and the USA. Hydra-Grene supplies hydraulic components from its in-house, advanced valve blocks to simple standard goods to turbine gear, brake and cooling systems and to pitch systems (i.e. hydraulic adjustment of blade positions). Furthermore, Hydra-Grene cooperates closely with wind turbine manufacturers in devel-oping the turbines of the future, hence ensuring a long-term sales potential.

Going forward, we are likely to see consolida-tion among the suppliers of hydraulic systems. With its strong position in the traditional industry sector as well as in the wind sector, Hydra-Grene is well positioned to take up the challenge and to participate in the continued development of the hydraulic sector.

Hydra-Grene has been a part of Schouw & Co. since 1988 and has been extremely profitable throughout. Hence, with its bright prospects for the future, Hydra-Grene is a very attractive company in the portfolio.







Equity 186 238


ROIC 24.1% 21.5%

Erik Lodberg,CEO, Hydra-Grene

15

Ma

rtin

Lighting, video and smoke entertainment – the world leader

With a market share of about 40%, Martin is the largest and most well-known manufacturer of lighting, videos and smoke machines for the en-tertainment industry in the Western world. Martin manufactures high-quality products with various functionalities and applications, and for this reason Martin is represented at eight out of ten concert tours world-wide.

The US market is Martin’s largest, but Martin’s lighting was sold in more than 70 countries in 2011 and is probably used in even more countries. Its products are sold for two primary applications – for rental purposes and for use in permanent installations.

As a result of the global financial crisis, Martin’s revenue was reduced by almost 50% in 2009, and the company incurred significant losses. Since then, it has undergone a transformation from manufacturing a major part of the lighting compo-nents in-house (circuit boards and metal parts), to primarily being in charge of design and installation. Thus, Martin has significantly improved its ability to operate in the climate of uncertainty that is as-sociated with the sale of cyclical products.

In 2011, Martin achieved positive operating re-sults, and the company’s progress and the results of the various company changes are impressive and satisfactory. Nevertheless, the 2011 revenue is far from satisfactory and in no way reflects Martin’s inherent potential.

Investing heavily to prepare for the futureThe company’s considerable investments in devel-oping new products is probably the main reason why Martin today stands stronger than ever before. Where previously only traditional discharge light bulbs were used in the lighting, it is the trend also in professional lighting to use LED lights in the fu-ture. LED-based lighting is less energy-consuming, more robust and has a wide number of advantages compared to traditional lighting, particularly in the interaction with large video walls that are nearly always used for concerts and TV shows.

Throughout the past five years, Martin has spent nearly DKK 250 million on developing new products primarily based on LED technology. Consequently, Martin has taken out a large number of patents, ena-bling it to manufacture products that offer entirely unique properties and that are also very competitive.

In 2011, about 40% of the revenue from lighting and video products was based on LED technology; five years ago this revenue only constituted 5%.

Continued growth and improvementsMartin expects to continue its growth in the coming years. The market has still not fully recovered, but the company believes that the products currently on the market are more widely used compared to previously. Going forward, earnings will increase through ongoing optimisation across the company, including, in particular, procurement and logistics.

Since 2002, Martin has had production facilities in China, but from 2012 this is no longer financially viable. LED lighting is designed to keep the level of wages at a low percentage of production costs, but since the company’s products are primarily sold in Europe and the USA, the logistics and plan-ning costs now exceed the profit that the Chinese production previously yielded.

There is no doubt that Martin operates in cycli-cal high-risk markets. However, the company today stands stronger than before and now operates from a platform with a significant pipeline of new products boding well for the future.


Operating profit (EBIT) 2 -69

EBIT margin 0.2% -9.7%

Profit before tax -19 -87



Equity 178 195


ROIC 9.4% neg.

Christian Engsted,CEO, Martin

16

Revenue (DKKm)

’07 ’08 ’09 ’10 ’11

1,17

3

1,04

5

647 71

5

855

17

Wind turbines and fish farming – biogas and innovation

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

Schouw & Co. holds 4 million shares in Vestas. At December 31, 2011, the stake had a market value of DKK 248 million. The holding of Vestas shares is not a strategic stake.

LerøyIn 2010, BioMar divested its ownership interest in the Norwegian fish farming business Sjøtroll Havbruk to the Norwegian company Lerøy. About one quarter of the selling price was paid by way of shares in the listed fish farming company Lerøy, which in 2011 generated revenue of more than NOK 9 billion making it the world’s second-largest producer of salmon and trout. Prospects are very good for the global fish farming industry, as the only sustainable way of increasing the global fish supply is through industrialised fish farming.

Schouw & Co. holds 1 million shares in Lerøy. At December 31, 2011, the stake was had a market value of NOK 84 million. The holding of Lerøy shares is not a strategic stake.

XergiSchouw & Co. has been involved in the biogas field since 2001, and today co-owns Xergi on a fifty/fifty basis together with Dalgasgroup (Hedeselska-bet). Xergi is one of Europe’s leading suppliers of turnkey biogas plants. Its core business consists of technology development, system design and in-stallation as well as turnkey system operation and maintenance. Biogas has very positive prospects as an alternative source of energy that may con-tribute to solving the ever growing need for energy in the future, while also providing environmental improvements.

Xergi generated revenue of DKK 96 million in 2011 and is expected to increase revenue to DKK 160–200 million in 2012.

IncubaSchouw & Co. has held a 49% interest in Incuba for a number of years. Incuba is a co-owner of Incuba Science Park, which runs three science parks in Aarhus, Denmark and is currently building a fourth one: Navitas Park at the Port of Aarhus. In addition, Incuba is involved in venture activities, as well as in Østjysk Innovation, a government-approved in-novation environment.

Financial calendarApril 11, 2012 Annual General MeetingMay 3, 2012 Release of Q1 2012 interim reportAugust 16, 2012 Release of H1 2012 interim reportNovember 8, 2012 Release of Q3 2012 interim report

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Board of DirectorsJørn Ankær Thomsen, Chairman Erling Eskildsen, Deputy Chairman Niels Kristian AgnerErling LindahlKjeld JohannesenJørgen Wisborg

Executive ManagementJens Bjerg Sørensen, PresidentPeter Kjær, Vice President

Schouw & Co.’s web site – www.schouw.dk – contains announcements to the Copenhagen Stock Exchange and press releases as well as more detailed information on the Group. Interested parties can also subscribe to the company’s news service.

Jens Bjerg Sørensen, President

Jørn Ankær Thomsen, Chairman

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

At the end of 2011, the company held 2 million treasury shares, equal to 7.88% of the share capital. The market value of the holding of treasury shares was DKK 186 million at December 31, 2011. The portfolio of treasury shares is recognised at DKK 0.

The official price of Schouw & Co. shares at December 31, 2011 was DKK 92.50 (all trades), and the total market capitalisation of the company’s listed share capital amounted to DKK 2,359 million. Adjusted for the holding of treasury shares, the company’s market capitali-sation was DKK 2,173 million.

Shareholder structure

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

Givesco A/S 28.09%Direktør Svend Hornsylds Legat 14.82%Aktieselskabet Schouw & Co. 7.88%

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

Published March 2012 by Aktieselskabet Schouw & Co.Translation: Fokus Translations Photos: Allan Toft, www.allantoft.dkDesign, production and print: Datagraf, www.datagraf.dk

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AktieselskabetSchouw & Co.

Chr. Filtenborgs Plads 1DK-8000 Aarhus C

T +45 86 11 22 22F +45 86 11 33 22

[email protected]

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Schouw & Co. shareholder magazine 2011

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