Strong earnings in uncertain markets (Q2 2024)

The Schouw & Co. newsletter: the latest financial updates, sustainability matters and insights.

INTERIM REPORT
Strong earnings in uncertain markets

After a satisfactory Q2, Schouw & Co. has reported a significant increase in earnings, and cash flow from operations has maintained a high level. The positive results throughout the quarter mean that Schouw & Co. has raised its guidance for the full-year EBITDA.  

Highlights from the interim report for Q2 include:  

• 8.7 DKKbn in revenue – 5% reduction 

• 737 DKKm EBITDA – 11% increase 

• 337 DKKm in cash flows from operations – a DKK 17 million reduction 

• 10.52 DKK earnings per share – 14% increase 

• 13.8% ROIC excluding goodwill – a 2.5 pp increase 

The increase in earnings can to a certain extent be attributed to BioMar and their focus on continuous developments, strong product offerings, as well as a number of excellence initiatives. On the other hand, the revenue decline, as foreseen at the outset of 2024, should be seen in the light of a decrease in activity levels and prices, as well as the fact that industrial businesses are facing challenges of decreased activity in general.   

Based on the first half of 2024, full-year guidance has been upgraded, thus projecting EBITDA in the range of DKK 2,810-3,060 million in 2024, against the previous range of DKK 2,740-3,040 million, and the revenue projection has been lowered and is now expected to be in the range of DKK 34.2-36.4 billion, against the previous range of DKK 34.8-37.3 billion.  

Read more about the results in the interim report here.

NEWS
Other news from Schouw & Co.  

• Successful bond issue in the Norwegian market, securing NOK 1.3 billion, ensuring further financing options in the future. The bond will be listed on the Oslo Stock Exchange.

• We completed the second edition of Accelerated Growth, a Schouw & Co. development programme, and saw immense development in our 12 participants.

• We have welcomed our new Chief Financial Officer, Thomas Hansen, who joins us after a long career at Vestas Wind Systems.

• The Schouw & Co. team went Out of Office, discussing strategy, value proposition and future-proofing.

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SUSTAINABILITY
Intensification of sustainability initiatives

Like many listed companies in Europe, Schouw & Co. is preparing for the upcoming implementation of the new EU Directive for sustainability, the Corporate Sustainability Reporting Directive (CSRD), which will be integrated into the Annual Report from the financial year 2024.  

In addition to the ongoing work at Schouw & Co., several of the portfolio businesses are also gaining traction within the sustainability framework.

Highlights include:

GPV implementing a new Supplier ESG Performance Score that supports their intentions of doing business in an orderly fashion, with the expectation that their suppliers do the same. With the new Supplier ESG Performance Score, GPV hopes to:

🌱Improve transparency within the supply chain
🌱Assess supplier compliance with ESG standards
🌱Identify opportunities for improvement and collaboration
🌱Provide suppliers with an ESG score to benchmark performance

The above supports GPV’s ESG ambitions towards 2028, where one focus area is a more sustainable supply chain.

BioMar published its 2023 Sustainability Report, highlighting results such as:

🌱15.3% reduction in scope 1 & 2 emissions (baseline 2020)
🌱12.5% reduction in scope 3 emissions (baseline 2021)
🌱Forage Fish Dependency Ratio has reached a historic low of 0.67, the best FFDR in BioMar’s history
🌱Enabled over 45,000 people throughout the supply chain