Full Year 2018 Schouw & Co A/S Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : My first question would be on BioMar also and the big contract that you was going to renegotiate with the Ler°y at the end of '18, as far as I remember. Could you tell us how the negotiations has gone here, and if it's extended?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Sure. And is it -- am I right in remembering that this contract was a couple of hundred thousand tonnes a year?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Okay. Okay, and it is in your guidance?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Sure. But is it too early to then talk about how your customers is reacting to this new approach?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Okay. Good, good. Then on Nonwovens and the strategic review here, it is planned for first half of '19, I can see. Will it end with some kind of an announcement? Or will it be -- the result, will it be published in connection with the half year results? Or how should we see this?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Sure, sure, sure. And one thing that pops up within FIN continuously is the loss-making unit in South Africa. I remember, we talked about it in the past that you had to kind of get it to breakeven because it -- the close-down cost for this part of the business is attractive compared to the loss run rate you have.

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Okay. And then -- and is it fair to assume that you are expecting breakeven in South Africa in '19?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : And then my last question is on GPV, and sorry, there's a lot of numbers here, but you made an EBITDA of DKK 115 million this year with a drag down of DKK 25 million from Mexico and DKK 10 million from transaction cost in CCS. Then if we're adding the DKK 125 million from CCS in 2019, and of course, takes out the restructuring cost you have announced and the write-down of the inventories at the IFRS impact, then I get to somewhere around DKK 250 million in EBITDA, but you're guiding significantly less than that. How come?

Question: Lars Heindorff - SEB, Research Division - Analyst : Yes, gentlemen, also a few questions from my part. Firstly, regarding Borg. One, if you could give a little bit more insight into how much you actually factored in, in terms of impact from potential Brexit in the guidance there? That's my first question. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 08, 2019 / 8:00AM, SCHO.CO - Full Year 2018 Schouw & Co A/S Earnings Call

Question: Lars Heindorff - SEB, Research Division - Analyst : Okay. Then a little bit about BioMar. I know -- I'm not going to ask about the labor contract again, but in general, now we've been talking about this for quite a while, the changes in your recipes and that you want to deliver sort of more value-added services and more functional foods. Can you give us a status on how that is progressing and how that's been received among your customers?

Question: Lars Heindorff - SEB, Research Division - Analyst : Okay, I knew -- I know you say you're not going to disclose that, but can you give us a range, maybe, so we have an idea how much is what you call sort of fish feed and how much is a...

Question: Lars Heindorff - SEB, Research Division - Analyst : Okay. All right. And then last one regarding M&A here. Now the numbers, of course, this year is affected -- at least the end balance is affected by the acquisition of the CCS in Switzerland. And now you have the IFRS, which at least going to change the headline numbers. I don't know if it's going to change the view and your M&A approach going forward, but I mean, do you have room for more? Or do you still have appetite for more? And now I'm thinking, in particular, regarding growing further into BioMar?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : Just a follow-up. You said in the -- in your -- yes, your start, that you will focus on net working capital in 2019. And we've often seen a growth in working capital, and as a percentage of sales, working capital is now 19%. What -- how should we think about this? How big is the opportunity here in driving cash out of working capital in the coming years?

Question: Jonas Guldborg Hansen - Danske Bank Markets Equity Research - Analyst : So if you gave me a number, it would be a big number?