Schouw & Co. — Earnings Release 2016

Mar 10, 2017

The Schouw & Co. Group had a good year in 2016. The portfolio companies
reported good business activity in most market segments. Many of the
initiatives and activities undertaken were successful, and the Group upgraded
its guidance several times during the year.

Consolidated revenue was up by 14% from DKK 12,566 million in 2015 to DKK
14,369 million in 2016. The increase was due predominantly to the acquisitions
of Specma and GPV, which were consolidated from 1 January and 1 April 2016,
respectively. Fibertex Nonwovens and the former Hydra-Grene also contributed,
while Fibertex Personal Care reported flat revenue and BioMar’s revenue fell
slightly despite an increase in volumes sold.

EBIT rose from DKK 831 million in 2015 to DKK 1,038 million in 2016. BioMar and
the acquisitions of Specma and GPV were the main drivers of the EBIT
improvement. Fibertex Nonwovens and the former Hydra-Grene also contributed,
while Fibertex Personal Care reported a moderate decline relative to the very
good performance of 2015.

Highlights

Realised in 2016

-- Revenue rose to DKK 14.4 billion (2015: 12.6) with company acquisitions
making positive contributions.
-- EBIT was up 25% to DKK 1,038 million (2015: 831), which was better than
expected during the year.
-- Cash flows from operating activities rose to DKK 1,598 million (2015:
1,171).
-- Profit after tax in associates and joint ventures amounted to DKK 566
million (2015: 86), mainly from the sale of shares in Kramp.
-- Net interest-bearing debt was a net deposit of DKK 1,028 million.
-- High level of business activity: acquisitions of hydraulics company Specma
and EMS company GPV, sale of shares in Kramp, sale of Incuba Invest’s
shares in Scandinavian Micro Biodevices and a number of substantial
capacity-increasing investments in the portfolio companies.
-- Our ROIC improved for the seventh consecutive year, reaching 20.2%,
excluding goodwill, and 16.6% when stated including goodwill.

Outlook for 2017

-- Healthy activity in most market segments, but in all markets, winning
orders is a highly competitive process.
-- Allocating additional resources to prepare portfolio companies for the
future.
-- For 2017, we expect revenue of about DKK 15.6 billion and EBIT in the range
of DKK 940-1,060 million. However, consolidated EBIT is expected to be in
the upper end of that range.
-- Proposal to increase the dividend for the 2016 financial year by 20% to DKK
12 per share.

BioMar

-- BioMar reported slightly lower revenue, but a considerable EBIT improvement
to DKK 581 million (2015: 447) driven by operational improvements and a
number of special factors. BioMar expects to increase revenue and improve
its core earnings in 2017, but EBIT is expected to be lower than the 2016
figure.

Fibertex Personal Care

-- Fibertex Personal Care reported flat revenue with a slight drop in EBIT.
For 2017, the company expects to grow its revenue and to report EBIT in a
range close to the 2016 EBIT.

Fibertex Nonwovens

-- Fibertex Nonwovens reported improvements in both revenue and EBIT. For
2017, the company expects revenue to continue to improve and EBIT to be
higher than the 2016 EBIT.

Hydra/Specma

-- Hydra/Specma reported improvements in both revenue and EBIT in its Danish
operations and a significant effect from the Specma acquisition. For 2017,
the company expects moderate revenue growth and EBIT in a range close to
the 2016 EBIT.

GPV

-- GPV reported improvements in both revenue and EBIT. Effective from 1 March
2017, GPV acquired EMS company BHE. The transaction has lifted the 2017
revenue forecast, whereas integration costs are expected to keep EBIT at
just below the 2016 EBIT.

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

”The Schouw & Co. Group had a remarkable year in 2016. Achieving a number of
milestones while generating EBIT of more than DKK 1 billion and a cash flow
from operations of DKK 1.6 billion, Schouw & Co. has built a very strong
financial position. We are seeing the positive effects of recent years’
investments in preparing our business for the future, and we have an attractive
platform for continuing to grow. However, these strong results and our strong
capital structure also bring with them a certain responsibility – and we are
confident that we at Schouw & Co. and our portfolio businesses have the
potential to continue creating long-term value.

It lies firmly rooted in Schouw & Co.’s DNA for us to think in terms of and
invest in long-term opportunities, but we also understand and respect the
importance of every single penny and of having the ambition to develop our
group in the short term as well. As an international business, at Schouw & Co.
we fully accept the responsibility that comes with operating globally. Creating
value in a proper and reliable manner always pays off in the long term.

Long-term investment will also a key factor for Schouw & Co. in 2017, as we
expect to allocate additional resources to upgrading organisations and
managements. We will be focused on projects involving innovation and future
value creation. Even business-to-business industrial players need to think
about digitalisation and to be adaptable and ready for change.

Schouw & Co. has a strong, solid platform. We regularly assess attractive
investment opportunities involving either our existing portfolio companies or
the potential of adding new businesses to the portfolio. Our performance and
our capital structure involve a certain responsibility, and we stand well
prepared to continue creating long-term value.”

Conference call

-- Schouw & Co. will be hosting a teleconference (in Danish) for analysts,
the media, etc. on Friday, 10 March 2017 at 09.00 CET.
-- Those wishing to attend the teleconference are invited to call tel. +45 70
22 35 00 using pin 74540720#.
-- An accompanying presentation can be downloaded from www.schouw.dk.