Ladies and gentlemen, welcome to the Schouw & Company's full year report 2019. Today, I am pleased to present CEO, Jens Bjerg Sørensen. For the first part of this call, all participants will be in listen only mode, and afterwards there will be a question and answer session. I will now hand you over to Jens Bjerg Sørensen. Please begin.
Thank you, and good morning to everyone. Welcome to presentation of our 2019 annual report. 2019 was a good and strong year for Schouw & Company, and we are very satisfied with our results. We experienced challenging market conditions, but we are also benefited from our strong positions. It was a year where we nearly finalized a major investment program. Our revenue was up 15% to almost DKK 21 billion. We had a positive full year effect from our recent acquisition of the Swiss EMS company, CCS. BioMar continued their strong development also in 2019. EBITDA increased 24% to DKK 1.95 billion or 10% like for like if we exclude our IFRS 16 from that. The effect from IFRS 16 was DKK 208 million out of this EBITDA. We had a good development in four out of our six portfolio companies.
Cash flow from our operations improved from around DKK 800 million- DKK 1.4 billion. We saw solid effect from our ongoing focus on net working capital, there's still room for further development. We had CapEx investments of DKK 774 million throughout the year and acquisitions of around DKK 260 million in 2019. Our guidance for 2020 is still expecting a growth, however, a lower level than last year. We expect the revenue to grow 3% to DKK 21.6 billion, our EBITDA is now guided in the range of DKK 1,935 million-DKK 2,105 million. We expect the CapEx in the area or around DKK 550 million-DKK 600 million in 2020. We have not factored any major corona effect or estimate into our guidance at this time. Turning on to BioMar. I would say BioMar had a strong finish to 2019. Their revenue was up 8% to DKK 11.2 billion.
We saw a 3% increase in volume to 1.2 million tons. Especially, we had a very good development in our salmon segment, and we also saw effect from full ownership of our joint venture in Chile. EBITDA increased from DKK 713 million to nearly DKK 966 million. In BioMar, we had a positive effect from IFRS 16 of DKK 128 million. Still, we are very satisfied with the EBITDA development. Some of the development came from strong profitability in Norway. Norway had been taking back positions after losing a large customer in 2018. We also saw and experienced increase in sales of our innovative and functional feeds. 2019 was again a very busy year for BioMar. We implemented a new market strategy in Norway. As I said, we gained more momentum and improved profitability significantly.
We have new factories built in both China and Tasmania, and they are both ready to start production in 2020. We added new capacity in Denmark and in Ecuador, and we gained 100% ownership of our joint venture in Chile. That increased production capacity in Chile with almost 50,000 tons. We have also been investigating a potential IPO of our stake in Salmones Austral, the farming company in Chile. BioMar Chile were unfortunately accused by FNE for having participated in collusive practices in Chile. We do not agree, but we cannot comment any further on an ongoing case. It should also be said we have not made any provisions for any future potential fine. Guidance for 2020 shows that a solid progress is expected to continue. Revenue of around DKK 12 billion, EBITDA in the range from DKK 1 billion-DKK 1.06 billion.
We have some corona effect, seen a small corona effect in BioMar due to the shrimp export from Ecuador to China has been affected, and of course, we expect for some months lower feed sales in Ecuador. Our associated companies expects profit after tax in the level of around 60 million DKK. From BioMar to Fibertex Personal Care, where we saw a flat revenue in 2019 of around DKK 2.2 billion. Competition continues to be fierce in Europe and also in Asia. Asia remains challenging. We saw lower volume in Malaysia, lower than expected due to the situation on the big global brands in China. The EBITDA increased from 350 million DKK-352 million DKK. Here we saw a positive effect from raw materials and currency of around 50 million DKK compared to 2018.
We started up a new print facility in the U.S., which had a negative impact of around DKK 12 million on the EBITDA. We had a positive effect from sales of added value in Fibertex Personal Care. In 2019, we had strong focus on starting up our print facility in the U.S. in North Carolina, where we have now one printing line in operation. We also had continuous focus on building niche products and being innovative, and we had a streamlining of structure ongoing. The guidance for 2019 shows revenue of around DKK 2.1 billion. EBITDA is expected in the range of DKK 280 million-DKK 310 million. Looking back at 2018 and 2019, it's around the same area if we exclude for impact from ForEx and from raw materials. We also see that competition continues to be tough due to excess capacity in the main markets.
We have experienced some short-term positive demand due to the Corona situation, meaning that we have seen more volume coming to our factory in Malaysia. Fibertex Nonwovens increased their revenue 8% to DKK 1.7 billion, in general, it was not a satisfactory year for Fibertex Nonwovens. The growth has mainly been driven by a new facility in the U.S., I have to say that our U.S. operation, in general, had a very solid year. We experienced some soft demand from our automotive segment in Q4. EBITDA decreased from DKK 160 million- DKK 141 million. First part of the year, we were challenged by very high raw material prices. Now we see a positive effect from that. We had, due to a strategic review, some one-off costs in Fibertex Nonwovens. We have restructured our operations in India and South Africa with an effect of DKK 13 million on EBITDA.
We had a one-off cost on acquisition, M&A, and also on our strategic review program going on. In 2019 we had the strategic review going on, and it outlined our strategic direction. We have had very good integration of our new granulating facility in the U.S. We decided to downscale our operation in South Africa, and move line number two to U.S. where we are out of capacity and expect to see positive impact from that in future. We have also started industrial-scale production of nanoproducts and advanced filtration medias. Outlook for 2020 is revenue of about DKK 1.75 billion and EBITDA in the range from DKK 165 million-DKK 185 million. We will see an uplift in the U.S. We have a strong position now in the U.S., and we think also we will see a positive effect from a more focused European operation.
We have, due to the corona situation, short-term experienced strong demand of materials to face masks. For the time being, we are running full capacity at our nano lines. Turning on to GPV. Revenue increased to DKK 2.85 billion. It was a totally different GPV we saw in 2019. We had full effect from the acquisition of Swiss CCS. However, we also experienced that a few larger customers showed slower demands, especially in the semiconductor industry in Switzerland. We have gained a very solid position in the European EMS market. EBITDA increased to DKK 196 million. We had a very negative impact from currency from the THB of around THB 17 million, and of course also some costs on integrating two companies in the size of around DKK 11 million. We are still struggling with profitability in our Mexico operation due to lack of top line.
The operation there is now running efficiently, EBITDA effect is around negative of DKK 29 million. In 2019, as I mentioned, we have had a very successful integration of CCS. We can now say we have one company, one name. The name is now GPV. We have extended our factory facilities in Thailand to secure capacity and equipment efficiency. Our Mexico operation shows operational progress, but as I mentioned, lacks top line. We have been working on establishing a long-term factory footprint strategy and decided on that. Looking at 2020, revenue is expected to be flat, DKK 2.8 billion. EBITDA in the range of DKK 210 million-DKK 240 million. We see some uncertainties on demand from several large industrial customers, among other things, due to the Corona situation. HydraSpecma increased their revenue 6% to DKK 2.1 billion, especially the wind segment were the key driver for growth.
We had a strong sales to the wind segment in 2019. In Q4, we experienced soft demand from a large customer from the vehicle segment, especially in our Swedish operations. EBITDA increased in 2019 from DKK 175 million- DKK 250 million. In HydraSpecma, we had positive IFRS 16 impact of around DKK 30 million. HydraSpecma have had strong focus on cost-out projects at all levels and also on the production efficiency at all the facilities. 2019 had a strong focus on setting up the future supply chain. We have been ramping up production in China. Our Chinese operations were very profitable in 2019. We have relocated our Polish setup to a new and efficient 7,000 sq m facility. We have implemented our open new warehouse and logistics setup in Finland. We decided to build new facility in Sweden outside Göteborg.
Outlook for 2020, with a revenue of around DKK 2 billion, EBITDA in a range of DKK 200 million-DKK 220 million. Also here we see some uncertainties on demand from several large industrial customers also due to the corona situation. Borg Automotive had a lower turnover in 2019 with DKK 918 million in top line. We experienced soft demand throughout the year. However, it started to pick up again in the last months of the year. This soft demand started already Q4 in 2018 and something we have seen all over in the markets, customers, competitors, et cetera. We were confirmed that we have a strong and leading market position. EBITDA declined from DKK 131 million- DKK 110 million. Here, we really saw effect from lower volume and of course, efficiency and things regulation can cause and so on has affected it.
We restructured our engineering setup in the OEM and R&D and also took some one-off cost on that. Also, we activated some R&D costs in 2018, which we didn't do in 2019 due to restructuring. Also, in 2019, we had full focus on strengthening structure and growth internally. We have been building a strong pipeline in most markets, interesting new customers in the pipeline. We have restructured, as I mentioned, our R&D and our OEM sales setup, and we have adjusted our general cost base and implemented IT structures throughout the company. Guidance for 2020, we expect growth revenue of around DKK 975 million and EBITDA in the range from DKK 110 million-DKK 120 million. Maybe we could see some positive short-term impact from the corona situation as goods from China may not be flowing into Europe at the same pace as in 2019.
Wrapping everything up and outlook for 2020, general, we see continued challenging markets, but also interesting opportunities. We expect to grow in 2020 despite this softer demand, and we really think that our strong positions and innovative products will be key drivers for us in the coming years. Revenue expected around DKK 21.6 billion. We have a capacity to grow and also want to defend our market shares. EBITDA is now expected in the range of DKK 1.935 billion-DKK 1.2 billion, and we have really strong focus on profitability in all companies. We do not forget our focus on net working capital in 2020. We will still be improving on that, and there is still something to do there. With these closing remarks, I would like to open up for questions.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press 01 on your telephone keypad now. Our first question comes from the line of Jonas Sjöberg from Danske Bank. Please go ahead. Your line is now open.
Good morning, Jens and Kasper. A few questions from my side. Talking about net working capital, you reduced net working capital to sales from around 19% in 2018 to around 18% in 2019. Still a high level, I guess we should expect further improvement in 2020. Confirmation on that would be my first question. Secondly, you have previously flagged some Brexit risk, especially in Borg Automotive and in BioMar. Could you just elaborate a bit on how you view the world right now, given the Brexit, and how it is implemented into your guidance? Lastly, on Fibertex Nonwovens, just remind me of the total one-offs in 2019. Thank you.
Thank you, Jonas, thank you for your questions. First one on net working capital. Yes, I think you know, it has been my personal focus area in 2019, as I said, we have not won the battle yet, we expect also to reduce in 2020. Of course, if we see activity level increasing and so on, we have to adjust to that. We have strong focus on that and expect to reduce. We have some areas where there's still room to improve on. Looking at Brexit, you could say, if we look at BioMar, we are not that concerned because most of what's going on in the U.K. is internal. There were some discussions on keeping raw materials in, as long as there's no deal, et cetera, it will first be ultimo 2020 if something happens, we haven't factored anything into that.
It's a little bit the same with Paul, where we have been nervous on what about if a hard Brexit, et cetera, came. Now we expect no real impact in 2020. Of course, we have to consider and look at what happens throughout the year when the negotiations are ongoing. If we turn to Phabatech and loans, we have had one-offs of around DKK 20 million in 2019.
Okay. Thank you.
Thank you. Our next question comes from the line of Claus Almer from Nordea. Please go ahead. Your line is now open.
Thank you. Yeah. Also a few questions my side, we'll take them one by one. The first question goes to BioMar. Jens, you mentioned that you expect negative volume in Ecuador in 2020. Shouldn't that have a negative EBIT margin impact? That would be the first question.
Yeah. My main point is that the first months we have seen some lost volume on feeding because they didn't sell any shrimp to China. China has opened up again, and maybe I didn't remark that 100%. China has opened up again and Ecuador is now exporting shrimps back to China. We will lose some volume, but we have factored that into the guidance we are giving now. It's because we know what we have seen so far, and we don't expect big losses the coming months on volume.
Coming back to the big theme, net working capital and congratulations with the first important steps in the right direction. Looking at BioMar, net working capital is up by, I think, 55% versus end of 2018. Is that the disconsolidation of your previously partly owned Chilean farm, or what's going on in that area?
That's one, but it doesn't explain everything. There's a multiple of factors going on. One thing is we are building our new facility in Tasmania. In Tasmania, they are supplied from the U.K., and we are ramping up volume, and we have had a lot of volume from the U.K. on the sea and down to Tasmania, and we have also built up security stocks in Tasmania, so it means quite a lot. We have changed the sales. More volume in geopolitical areas with longer credit terms for customers. Norway, where we used to have more volume with very short payment terms, et cetera. It's a mix of things, but we expect net working capital in BioMar really to fall in 2020.
As a percentage or absolute?
Absolutely, but also as a percentage, because one of the key drivers is really building up in Tasmania. It's really a lot of them.
These longer credit terms, is that a temporary issue? Why do we really offer that to farmers who are making a lot of money these days?
Yeah. Of course, it's something we are on every day, but it's part of the way you compete in the market. It's price, it's payment terms, it's whatever goes. If you move more sales to Mediterranean area, to South America, and so on, there are normally longer payment terms than around the North Sea area. Of course, it's something we are addressing a lot and working on.
There's no change in your use of supply chain financing, so still around this DKK half a billion, as I recall?
There's no change in that. We have that. Yes.
Okay, just my final question. Share buyback. Given the strong cash flow and hopefully the same in 2020, shouldn't we expect a program to be announced?
Of course, it's one of the tools we have in the toolbox, and we discuss it, of course, on a running basis. We have not decided anything on that, but I'm not excluding anything on that. It's not in the making for the time being.
Does that mean there's an M&A potential around the corner?
We are always looking at other interesting M&A opportunities. Of course, also we think maybe with, is the world a little bit nervous etc., maybe it could open up opportunities. Of course, that's also part of our considerations, yes.
Okay, thanks so much, Jens.
Thank you. Our next question comes from the line of Laurids Kjergaard from ABG. Please go ahead. Your line is now open.
Thank you, good morning, Jens and Kasper. First of all, on the CapEx program, which you announced for 2020, DKK 550 million-DKK 600 million versus DKK 374 million in 2019. Could you give some flavor on the seasonality of this and what's the biggest impacts for 2020 that we should look out for?
Yeah, I think, biggest impact will be in GPV, where we are investing and rebuilding in Sri Lanka, doing something in Thailand, et cetera. We'll see impact of our new facility in HydraSpecma in Göteborg, also just outside Göteborg. In HydraSpecma, GPV, and then we are finalizing Tasmania, the factory in Tasmania, but it's not a big one. A lot of the biggest impacts are coming on normal operational CapEx, you could say.
Okay. As far as I understood, a lot of it would be coming in the first two quarters and three quarters of 2020. I believe that was mentioned last year.
It is normally, as at the end of the year, normally you have finalized your running on CapEx, et cetera. I think you could say yes, the first half, maybe the first three quarters of the year, yes.
Okay. Just to get a sense of that, basically you will be completing a lot of these larger CapEx throughout the first half, then I guess over the summer, you'll be looking at your negotiations with BioMar to get a better idea of your capital structure. Could we perhaps expect the potential buyback that I believe Jonas was talking about or even an extraordinary dividend to be paid during the summer? Is that totally ruled out?
I think that extraordinary dividend is totally ruled out. You never know, of course, what happens and what the board decides on. I think it's not in our thinking. Share buyback is something we have done occasionally and are looking into, and of course, we need to have a balanced capital structure. Depending again on what happens in the market, interesting opportunities, nothing happens at all, et cetera. Of course, we also know we cannot sit too long on cash, et cetera. Extraordinary dividend, that's not in our toolkit for the time being.
That's very clear. Just lastly, on HydraSpecma, here looking at a slowdown in vehicles, but probably could result in wind, which you mentioned. Could you give some flavor into what's the mix here between vehicle and wind slowdown or any flavor there?
The wind has really been strong in 2019. It is our largest segment, that's wind. With around DKK half a billion or something in turn, I would say it's a very important segment for us. Also vehicle as a construction equipment, off-road equipment, et cetera, is a strong segment for us, which came in with the acquisition of Specma. It's mainly big Swedish companies there.
Vehicle is how much if wind is DKK half a billion?
I think maybe 400 or something like that, yeah.
Would you give some flavor into what it was last year?
No, I say it's maybe around DKK 400 last year.
Okay. Thank you very much.
Thank you.
Thank you. Just as a reminder, if you would like to ask a question, please press 01 on your telephone keypad now. Our next question comes from the line of Ulrich Bach from SEB. Please go ahead, your line is now open.
Yes, good morning, Jens. Also, a few questions from my side. As I see it, you performed very strongly in BioMar in Q4 and have continued a very wide revenue cost per kilo spread. I was just wondering because we saw a hike in that in Q3, and now it has continued also in Q4, if this is a sustainable level also throughout 2020?
Yeah, we think so as we have worked a lot on becoming more efficient. When you get volume and scale and so on, you have the opportunity to just drive down costs. Yeah. I think that is part of it.
Any particular geographical split of this improvement? Is it primarily Norway, where you've done a lot of initiatives, or is it elsewhere?
It's in general, but of course, also Norway, they have really been doing well on a lot of things. The cost split is of course also depending on what kind of products are you selling. When you sell more on the functional feed side, higher prices, et cetera, then of course you will see a better cost structure, et cetera. It's across the company, you could say. Of course, Norway has contributed a lot also.
Okay, thank you. The Corona impact on shrimp feed. Why is it only shrimp feed that is being affected and not salmon?
It's because it's so direct in Ecuador, where we have this operation that 60% of the export of shrimps out of Ecuador goes directly to China. It has a huge impact. The grow-out period of shrimps is short and meaning that there's a lot of shrimps in the making, so yeah. That's why.
Okay. Thank you very much.
They can stop feeding for some time and then reduce feeding and so on to secure their growing stock. That's the reason, yeah.
Okay. Thank you, Jens. That was my question. Thanks.
Thank you. After those are the questions registered at the moment, I will hand the word back to you, Jens, for your final comments. Please go ahead.
Thank you very much. Thank you for questions. Thank you for listening in. Wish you everyone a good weekend when it's coming. Bye-bye.
This now completes today's call. Thank you all for attending, and you may now disconnect your line.