Ladies and gentlemen, welcome to the Schouw & Co. Q1 Interim Report 2019. Today, I'm pleased to present CEO, Jens Bjerg Sørensen. For the first part of this call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. Jens, please begin.
Thank you very much. Also welcome to our Q1 conference call. Overall, Schouw & Co. saw a good start of the year with positive growth. You should also bear in mind that Q1 is our smallest quarter due to strong seasonality in some of our companies. The revenue overall was up by 21% to DKK 4.7 billion. We saw a mix of both organic growth and also effect from our CCS acquisition. EBITDA increased at 28% to DKK 401 million. It was up 12% if we exclude for IFRS 16 effect. Profit from our associated companies increased due to a very good development from our fish farming operations in Salmones Austral and Chile. We have a strong focus on our net working capital. It's ongoing, will continue into 2019. It's on top of the agenda of management in all our businesses.
Cash flow from operations improved to DKK 100 million. Normally we have a rather weak cash flow in Q1. We're very satisfied with that development. The guidance for 2019 will be maintained both on a group level and also on individual businesses. Our revenue is expected to grow 10% to around DKK 20 billion. EBITDA will be in a range of DKK 1.8 billion-DKK 1.975 billion. We have to bear in mind also here that we expect to see a positive effect from IFRS 16 of around DKK 200 million. That was the overall introduction. Let me look a little bit into each of our company, starting with BioMar. If you look at BioMar, the revenue was up 13% to DKK 2.1 billion. Volume was up 12% to around 250,000 tons for the quarter. Also here we saw a very good development in all three divisions.
We have also had a positive climate conditions in the quarter. EBITDA in BioMar was up from DKK 80 million to DKK 132 million. Again, we experienced a positive effect from IFRS 16. Underlying our EBITDA increased 22%. In fact, BioMar is the company in our portfolio where we see the largest effect from IFRS 16. General, we had a very good margin management and also positive sales of what we call functional feed. Our Salmon Division, which is the biggest division, delivered strong results. Norway performed better than expected. Few highlights from Q1, could say, had very good progress on the new Tasmanian factory we are building, also on the capacity expansion going on in our Danish factory.
We got full ownership of our joint venture in Chile, where we acquired the remaining 50% from AquaChile, and it gives us an additional 60,000 tons capacity, which we hopefully can start utilizing second half of this year. Guidance for 2019 is, as mentioned, maintained. We see an EBITDA in the range from DKK 820 million-DKK 890 million. Again, here, plus IFRS 16 effect of around DKK 130 million on EBITDA. As usual, we have big contract negotiations going on in Q2 and during the summer period. However, we have seen a good start of the year, and it gives a good comfort for our full-year outlook. Also, some of the contract negotiations has already come out on a good tone. From BioMar to Fibertex Personal Care, where we saw a revenue increase of 9% to DKK 590 million. Mainly driven by higher raw material prices.
Volume was flat, specifically due to development in Asia, where we see a lack of volume from our big branded customers in China. EBITDA was increased from DKK 83 million to DKK 99 million. We had a positive effect from raw materials, but also good development in sales of what we call value-added products or products in softer materials. In Q1, we completed our new U.S. print facility, it's now ready for commercial production and will come into production on full steam during Q2. Guidance for 2019 maintained. EBITDA is expected in a range of DKK 320 million-DKK 340 million. As mentioned, a very good and promising start of the year. However, we will and expect to see negative effect from raw materials in the coming months, but the guidance will be maintained. The next Fibertex business, Fibertex Nonwovens, we saw an increase of 11% to DKK 450 million.
Especially here we saw good volume development in Europe, as we also expected. Then we had full effect from our acquisition in Brazil last year in the quarter. Our EBITDA, however, was down from DKK 45 million to DKK 39 million. We still see some negative effect from raw materials positions from 2018, but we are nearly through these raw materials. In fact, we also saw our South African operation that has been struggling over the years in a slightly better performance. We acquired a new site in the U.S., Greenville, because we have a strong expectation to the U.S. market in future. This acquisition gave us expected negative effect in the quarter, and we also had costs for the acquisition. All in all, that had effect on our EBITDA. In the Q1, our new factory in the U.S. in Greenville has been integrated.
Of course, there's a lot of work going on with that. We have, as mentioned also earlier, a strategic review ongoing in Fibertex Nonwovens with the aim of finding ways to improve profit and return of invested capital. That's the main aim, not because we consider to sell or potentially exit the Fibertex Nonwovens, but we will come back to the strategic review in H2 when we have finalized it. 2019 guidance maintained, but more likely in the low end than in the high end. EBITDA is in the range of DKK 165 million-DKK 185 million. We have, as mentioned, start-up costs from our new U.S. factory in this guidance. GPV had a revenue of DKK 718 million, a big increase there, but it's of course full effect from our acquisition of Swiss CCS, which we have integrated into GPV. EBITDA was up from DKK 25 million to DKK 46 million.
We have seen a satisfactory development. The old GPV or GPV we had before the acquisition delivered DKK 23 million out of DKK 46 million in EBITDA. We have, in fact, experienced a huge currency effect from the Thai baht of around DKK 10 million negative in the quarter. Also, we have seen integration costs and purchase price allocations of a negative effect of around DKK 10 million. The integration between the two companies is running very well. We are running one company, one name. It has been received very positive in the market. We have a lot of new customers in the pipeline, and we have already experienced the first cross-selling opportunities.
Our Mexico operation, which is from the old GPV, as you know, we have been struggling with a greenfield start-up, shows good progress, but will also, as we expected, be loss-making in 2019, but on a much better tone than we saw before. 2019 guidance will be maintained, EBITDA in the range from DKK 190 million-DKK 210 million. Here in these figures, we see one-off restructuring, integration, and purchase price allocation cost of around DKK 50 million. From GPV to HydraSpecma, a very positive story in Q1. Revenue increased 11% to DKK 556 million, mainly driven by sales to the wind turbine segment and also the segment we call construction equipment. EBITDA increased from DKK 49 million to DKK 60 million. We've seen very high efficiency, strong margin management. Our China operations turned around and are both profitable and in a very good development.
We see, however, still long lead times and increasing prices on the main components. It has affected our EBITDA as well as a very weak Swedish krona. A few highlights from Q1. We have opened a new facility in Stargard in Poland, 7,500 sq m brand-new facility. It will improve efficiency in the coming years. We see a strong backlog in the main segments. We have also started and are preparing production of big hydraulic units in China. Our guidance for 2019 will be maintained. We are positive on it. EBITDA in the range from DKK 210 million-DKK 230 million. HydraSpecma, they have a very strong focus on reducing their net working capital, but our global footprint and difficult lead times on components increases our inventories in general.
Our newest company in the family or in our portfolio, Borg Automotive, experienced a revenue decline, 5% down to DKK 230 million. We have, since the beginning of Q4 2018, experienced rather soft European markets. It continued also in Q1, that we also expected. We have kept our market share as we see a stable customer base but still face rather soft demand. EBITDA was down from DKK 38 million to DKK 33 million. Of course, effect from lower sales and lower volume, but also a more cautious regulation on our cores. We have set aside more on core regulations in 2019 than we did in 2018. We have, in the quarter, done a lot on streamlining. We are streamlining the company. We are restructuring our facility in Belgium.
We have strong cost and contingency plans. We are scaling down on FTEs in Poland to withstand the lower volume. We expect still to increase it over the year. We have started a new facility for production of big calibers in Lublin, Poland. Guidance is maintained in spite of soft markets. EBITDA in the range of DKK 140 million to DKK 150 million. As mentioned, we expect markets to normalize more over the coming months. Short wrap-up. We have what I call a positive outlook in our largest businesses and a softer outlook in two of the smaller businesses. Still, we expect to grow in 2019 revenue around DKK 20 million. Guidance is unchanged. EBITDA in the range of DKK 1.815 billion to DKK 1.975 billion. Strong focus on profitability. We continue to focus profit over volume in all our businesses.
Also, just to finalize, I would like to mention that we are at the end of what we call a major investment program that has been going on in all our companies over the last two years. Strong focus on utilizing capacity. We will see cash flow effects as investment cash flow effect from the remaining investment programs, which we decided back in 2017. We will have strong efforts on reducing net working capital and drive operational cash flow also in 2019. With these remarks, I would like to open up for questions.
Thank you. Ladies and gentlemen, if you have a question for the speaker, please press 01 on your telephone keypad. Our first question comes from the line of Jonas Guldbrand from Danske Bank. Please go ahead.
Hi, Jens. This is Jonas. First of all, if you could talk a little bit about this strong focus you have on working capital. What especially are you doing and try and talk about how you're doing it, and maybe also where you think you will end for the year? Then on Nonwovens, you have this negative effect from raw material prices on your earnings. Maybe you said it and I didn't hear it, but are you able to give a number on this negative effect on EBIT? Then the last thing is on this core regulation, you said you put more aside in 2019. Could you just try and explain what this means and how much it is?
Thank you very much, Jonas. Thank you for your questions. First, on the working capital. We are running a, what we call a corporate program on working capital, strong focus in all our companies. We are running a special program with four of our companies, initiated from corporate, where we have some outsiders to help doing a lot of analysis, et cetera. In fact, a strong program running. Of course, we expect net working capital to be reduced over the year. I cannot put a 100% exact figure on expectations so far, but we initiated this program and it's new, and it will drive net working capital down, definitely. If you look into the Nonwovens, where I said we still have had some raw material effects from 2018, where the raw materials were high.
We buy raw materials from India, China, and around. We have been having big stocks. Not big stocks, but still a lot of on stocks that we have been using in 2019. I would say around DKK 5 million-DKK 6 million effect on that. If we look into the core regulations, we normally every month set aside something on this regulation. It's a rather complex structure, but last year we experienced that we have been maybe not conservative enough in the start of the year. Remember, we had to do a negative regulation at the end of the year. This year we have started a more, I would say, much more conservative and in fact it's around DKK 6 million more in the quarter than last year.
These 6 million are then impacting EBIT negatively?
Impacting EBIT negatively now, it can maybe come back, but it's more also if you compare 2018 to 2019, then we have a much more, you could say, cautious, prudent view on these regulations because we had to do something last year. Around DKK 6 million more in regulations.
Okay. The net working capital program you're running, that would have effect from this year?
Yeah. It is already having effect, and it will have effect from this year, but not full effect. It's a big program we are running and have started this.
Okay, sure. Thank you very much.
Thank you, Jonas.
The next question comes from the line of Laurits Kierkegaard from ABG. Please go ahead.
Thank you very much, and thank you for the presentation. My first question is, when you gave your initial guidance for Q4, you essentially had two months of visibility for this quarter, and yet BioMar has delivered 13.5% growth and for HydraSpecma, 11.3% growth. Could you just guide us through what you're expecting for the rest of the year on the top line? Because it seems that you're guiding for almost low or even negative growth for those two businesses for the rest of the year with the current guidance.
You could say so, we also see we have had a good volume development in BioMar in Q1 and this volume development, especially in Norway and Chile, was bigger than we expect. We are going into the big contracts negotiations and as you may remember, we lost or declined a big contract to Lerøy last year, full effect from the 1st of April, meaning all the volume from Lerøy is gone now. We had maybe a little more volume in Q1 from Lerøy than expected, and also biological conditions in Norway were much better than expected. In fact, BioMar's volume grew 11%. Looking into HydraSpecma, we have also had a very strong Q1 because we delivered more into the wind turbine industry than expected. We expect our deliveries to the wind turbine to be a little slower in Q2.
You already mentioned on BioMar that you had a few negotiations and that was coming out on good terms. Can you put a few highlights on that?
More saying that we still see a lot of strong competition, but we have gained a few contracts and we've also lost a few. Again, with the mindset that we are looking at profitability and not on volume. Of course, we need some volume to run our business, but we have our profitability as aim number one, but we have had positive experiences from some of these negotiations, but there's still a long way to go.
That's very clear. Just one last question from me, perhaps I'll come back. On GPV, you mentioned a few large customers experienced reduced business activity during the quarter. Is this for GPV or is it for CCS? Also, how is the acquisition doing in terms of what you're guiding at the moment?
In fact, it was for GPV, a little bit for CCS, because CCS are having some customers doing business or in the semiconductor business, and they have been pretty low. Order intake first quarter was not disappointing, but lower than expected, but we've seen order intake taking up again. That's what we can say on that. You had one question more, I forgot that.
Integration.
Integration, sorry. The integration has so far really been successful. As I said, also one company, one name. We started our first day with the same name, a lot of things going on, and we have started to see to reaping the first low-hanging fruits. A lot of things are going on. Of course, there's still a long way to go, but so far, very positive. It's two cultures that get together and normally you will see more complications than we have been seeing so far.
That's clear. On Mexico is on GPV, what's the adverse FX impact there for this quarter?
Yeah, it's same as last year.
Okay. Thank you very much.
Yeah. Thank you.
The next question comes from the line of Claus Almer from Nordea. Please go ahead.
Thank you. Yeah, also a few questions from my side. The first is about the 2019 guidance. Jens, you mentioned the report, and I think also in this presentation that the guidance is for several divisions in the higher end of the range now. Why didn't you lift the low end of group guidance? That would be the first question.
Yeah. That's, in fact, it's a good question, Claus, but I think we still feel that we have this stretch in our guidance, and we feel comfortable with that. We also feel that we are much more on solid ground when we get into second half because we have these contract negotiations also ongoing on. We also know that over these months, it's very important what's happening. That's the reason behind it. We see some disturbance on currency and things and a little soft demand somewhere. That's the reason.
Okay. You're still expecting and needing winning some new contracts in Norway during the contracts negotiations during the summer months, right?
We expect to win, you could say, either a few new contracts or increase volume in some of the contracts we are already in. It's a dual game, you could say, and sometimes it's easier to gain more volume in a contract or with a customer you are already supplying because of your quality, your logistics setup and so on. It's a mix of both.
Okay. Just finally, maybe you could update us on pricing development and excluding the raw material impact within BioMar in the different markets. Is price or contribution margin going up, down or flattish compared to what we saw maybe in Q1 and Q4 last year?
I would say it's a big question, I would say it's very broad. If you look at Norway, contribution margin has been down in Q1, it's a mix of product. There's a lot of things you can do on your value-added products, et cetera. They are down. Looking in general, well, in Chile, Scotland, I would say it's around the same level. Ecuador may be a little bit down because mixed product mix, et cetera. All over, maybe a little bit down in Salmon Region and stable in the other ones, something around that. Nothing to really worry on.
Okay, just the final question. Care, the situation in China, are you starting to penetrate some of these local clients or customers, and at what price?
We have not gained any new customers yet in China. We have a task force and a strategic task force operating in China now. I think we expect to gain the first customer. Maybe we've got one or two very small customers. I'm not fully aware of that, but nothing significant. We expect from the second half to start selling into China, also because we need to decide on how to distribute it. Should we set up a specific distribution center, et cetera. It's a rather big study going on, but we want to penetrate China in a different way.
Okay. Thank you, Jens.
Thank you.
Just as a reminder, if you do wish to ask a question, please press 01 on your telephone keypad now. As there are no further questions, I'll hand back to you, Jens.
Thank you very much for listening, and also thank you for the questions. Goodbye from Aarhus.
This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.