Ladies and gentlemen, welcome to the Schouw & Co. Conference Call. I am Lorenzo, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for a question at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Jens Bjerg Sørensen, CEO. Please go ahead, sir.
Thank you very much for the introduction, and also from my side, very much welcome to our Q3 report call. Alongside myself in the room here sitting CFO Thomas Hansen and CIO Kasper Okkels to help me if any questions coming up. Now we have to flip to page two. Overall, we delivered a strong quarter, all-time high and very satisfying. Our revenue increased 16% to DKK 10.6 billion, and EBITDA increased 37% to almost DKK 1.2 billion, with a margin of 11.3%. In general, we saw broad-based improvements across all our portfolio. It is very positive to see also that our profit before tax increased 69% to DKK 881 million. We also saw a very satisfying development in our financial key figures. Our operating cash flow was up 8% to DKK 966 million. Our net interest-bearing debt was reduced 46% to DKK 2.6 billion.
Of course, also a huge effect from the proceeds from our IPO of BioMar. Our leverage is now down to 0.8 x EBITDA. Our return on invested capital ex-goodwill improved to 15.9%, and by that exceeded our old target of 15%. Also, something was going on in our portfolio. Spectre consolidated from September as the seventh portfolio company in our portfolio. I will come back to Spectre a little bit later. In general, we see high activity, and we have a very solid backlog that supports an increase in our full-year guidance. Now I am turning to slide three and going on to BioMar. BioMar experienced record high volumes and exceptional good earnings. Their feed volumes increased 5% to 488,000 tons. In fact, they experienced growth across all three feed segments. Revenue increased 19% to DKK 5.8 billion. Some of that was also based on very high raw material prices.
BioMar's EBITDA increased 44% to DKK 736 million. This was mainly driven by improved margins and BioMar's strong ability to utilize diversified raw material base. BioMar saw very strong earnings in the salmon and selected species segments. Their Shrimp segment had very good volume development, but earnings were impacted by high raw material energy costs, especially in Ecuador, and also toll milling. The segment was also hit by a bad debt and ramped up cost in Costa Rica and in Vietnam of around DKK 20 million. So, looking into the Shrimp segment, we see a stabilized profitability. In general, a very strong and underlying development in BioMar, good development in the JVs and associates companies. Working capital was reduced despite higher activity, and BioMar's return on invested capital ex-goodwill increased to 34.3%, which we think is rather impressive.
BioMar raised their guidance based on a strong year-to-date development revenue, now expected to be DKK 7.8 billion-DKK 18.6 billion, and EBITDA increased to be in the range of DKK 1.72 billion -DKK 1.79 billion. I am now turning on to GPV, page four. GPV had a very strong order momentum that drives earning growth. Revenue increased 9% to DKK 2.3 billion. GPV continued their high level of order intake. In fact, they are seeing a book-to-bill now of 1.92, which is very satisfying and impressive. EBITDA increased 26% to DKK 217 million. GPV's EBITDA margin increased from 8% to 9.3%, tracking well towards the target of 10%. GPV had continued productivity improvements across the company and also experienced benefits from a lot of structural efficiency initiatives and footprint decisions made. GPV is preparing for further growth. They are expanding their capacity in both Thailand and Mexico.
The commercial pipeline remains very strong, and we now see orders coming from the very interesting data center segment. However, GPV is also experiencing constraints from supply of selected components, but have a very good structure to manage that. GPV's guidance is raised. Revenue now expected to be DKK 8.8 billion -DKK 9.2 billion, and EBITDA increased to DKK 740 million -DKK 770 million. Turning to page five. HydraSpecma continued growth and very strong commercial momentum. Their revenue increased 12% to DKK 838 million, and also here we saw growth across their three divisions. Renewables and global OEM continued really to perform very strong. EBITDA increased 11% to DKK 108 million. Here, HydraSpecma had benefits from very solid supply chain optimization, also from their continued production footprint improvements, and the return on invested capital ex-good will increased to 19.5% for HydraSpecma. The company is investing for further growth.
We just took our new 22,000 sq m China facility in operation, and it is now full operational. HydraSpecma expanding their capabilities within cooling and fluid conveyance for the data center segment. Also, HydraSpecma, they are having a very strong order intake and a solid order book, meaning also guidance revenue expectations maintained DKK 3.4 billion-DKK 3.6 billion, but EBITDA expectations increased to DKK 444 million -DKK 465 million. Then turning to page number six on Borg Automotive. Borg Automotive's profitability is improving despite very difficult markets. Revenue flat, DKK 480 million, and also a part of that is a deliberate phase-out of unprofitable revenue, really scrutinizing the company for that. EBITDA increased to DKK 27 million. Especially, we saw improved profitability in the Newman segment. The transformation plan, Refine4Future, is now really delivering the productivity improvement and cost optimization as expected.
Working capital reduced 30%, and thereby also net interest-bearing debt reduced, which is very positive. Borg Automotive's commercial transformation strategy continues and shows good results. We now see One Borg Go-To-Market concept was launched, meaning that the reman and Newman concepts now are combined. We also experience good news in the market. We had what we call a remanufactured e-drive motor that won the prestigious Innovation Award at the Automechanika fair in Frankfurt. Of course, guidance is narrow, revenue a little bit down towards the lower end, also effect of phase-out of unprofitable revenue. EBITDA now DKK 95 million-DKK 110 million. Then turning to page number seven, Fibertex Personal Care is being resilient earnings in very volatile markets. Revenue increased 21% to DKK 507 million, was mainly driven by higher raw material prices. EBITDA, however, maintained at DKK 53 million.
In fact, earnings were stronger than expected despite this very high raw material volatility. We saw strong performance in our Danish operation, and also the printing business really continued to perform very well. Fibertex Personal Care improved their ability to manage volatility. They revised their pricing mechanisms and also were able to utilize a diverse raw material sourcing platform. They continued to have a strong focus on operational efficiency and also driving innovation, which is very important in this company. The market picture for Fibertex Personal Care remains mixed. The European demand expected to remain stable, whereas Asian, as also earlier, overcapacity and pricing pressure continues in that area. Guidance means that the revenue expectations are maintained, but EBITDA raised to DKK 170 million-DKK 190 million. Turning on to page number eight. Here we are on Fibertex Nonwovens.
Fibertex Nonwovens really saw strong growth and earnings, and the improvement continues in that company. Sales volumes increased 5%. Revenue increased 22% to DKK 678 million, a mix of raw material prices and product mix growth across several important segments and markets. Fibertex Nonwovens EBITDA increased 69% to DKK 88 million. Higher activity and operational improvements are key drivers, but also very solid profitability improvement in the very important U.S. market. Fibertex very broad-based commercial development. We have a strong product and project pipeline growth in the wipes and hygiene segments, mainly in U.S. and the European market. Also, as I said, a very attractive pipeline, especially in the, what we call, high-value segments. Fin Nonwovens raised their guidance. Revenue and EBITDA increased. Revenue now expected to be DKK 2.6 billion-DKK 2.7 billion, and EBITDA now expected to be DKK 280 million-DKK 300 million for that company.
Turning on to page nine and the last company in our portfolio, not the least, but the newest company in our portfolio, Spectre, is now part of Schouw & Co. We only show one month of activity with Spectre, it's a consolidated Spectre from September. Revenue was DKK 57 million. Turnover in Spectre has seasonal peaks. September usually rather low. EBITDA affected from acquisition accounting. EBITDA for the month negative DKK 10 million, but the underlying EBITDA on the turnover is positive. In fact, Spectre had DKK 14 million negative impact from a non-recurring and non-cash PPA issues or items. Spectre has a very strong platform for further growth. The order book is now 21% above last year. Spectre just opened their fourth factory in Vietnam during Q3. It's the most automated facility in the company, and big expectations for that. They also implemented a group-wide ERP system.
Outlook for 2026 is based on only four months of activity. Revenue is DKK 300 million-DKK 400 million, and EBITDA after acquisition-related costs expected to be around zero. The longer-term outlook for Spectre is, as also mentioned before, promising. Expecting organic growth and a 2030 ambition of DKK 1.7 billion-DKK 2.0 billion revenue, EBITDA in the range of 15%-17%. Turning on to page number 10, just a wrap-up on our full-year guidance. Full-year guidance increased based on very strong performance throughout the first nine months. Broad-based earnings across the entire portfolio, and also high order intake and solid order books in several businesses really gives a good comfort for the guidance, meaning that turnover now expected to be DKK 36.2 billion-DKK 38.1 billion, and EBITDA now DKK 3.37 billion-DKK 3.52 billion. Also, we expect to be able to deliver profit before tax above the DKK 2 billion mark.
So with that guidance update, I will open up for questions.
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioner on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Claus Almer from Nordea. Please go ahead.
Thank you. Yeah, first of all, Jens, congratulations with another very, very strong results in Q3. I have a few questions. I will do them one by one. The first one is more a broad top-down question. We had a very broad-based guidance upgrade after Q2, and now again, a number of upgrades in Q3. Is this upgrade more a reflection of being conservative from your side, or are you mostly surprised by very strong demand dynamics? That would be the first one.
Yeah, thank you for that, Claus, and I also thank you for what you are saying. No, in general, as I say, we always guide what we see and believe in. I have to say that not very surprised, but we are surprised that things are running very well. We really see now the effect of all our efficiency improvements, strong position in the market, and then also we are getting a grip on attractive new segments as data segments, defense, et cetera. So, positive for all of us that we have such a strong quarter. But it really shows that the platform we are standing on is maybe even stronger than we thought.
Okay. The second question goes to GPV. Can you give an update on your ability to source the various components and not least the lead time on these?
Yeah, that's a very interesting question because, of course, without saying it's a problem, it's always a concern, and we see these longer lead times, and we have set up a special task force to handle this, and then also decided that we are going to build up more inventory also meaning that net working capital and things will be higher, but we need to be able to supply. We have many years of experience in that, and so far doing quite well, but we have really put a lot of resources and efforts into that area because it's so important for us.
But, in the report, you write that there's a continued limited visibility, and yet you're on a book-to-bill, just going up, up. So, does that mean you get the orders, but you're not 100% sure when you can deliver on those? If that's the case, could we face some penalties if you are delayed?
No, also a very relevant question, Claus, and you could also say maybe somebody are really over-ordering because they are afraid of not getting supply and so on. So far, we believe in a very, very strong order book, and we have not had any supply constraints or delivery constraints so far. Normally, we have a good balance with our customers and so on. We have also, as you remember, years back, we had this purchase price variance system setting up that we source in these complicated components and then at not whatever price, but at the price, and then we pass it on to our customer. So, so far, no problems, knocking wood, and we are in a good position, but of course, we need to be concerned. Yeah.
Okay. Jens, I will not disappoint you, so I would just say well done on the net working capital performance in the quarter.
Thank you. Thank you very much, Claus. Thanks.
That was all for me.
Thank you very much.
The next question comes from the line of Ulrik Bak from Danske Bank. Please go ahead.
Yes, hello, Jens. Thank you for taking my questions. I will take them one by one as well. Following up on GPV, obviously, you talk about strong demand, strong order intake, but then also these concerns about component scarcity. In the quarter, we saw a quite nice margin uplift. As you perhaps see these challenges of component scarcity intensify, could we potentially see a hit to the EBITDA margin going forward, or how do you mitigate that?
That is not what we expect, and we have rather strong pass-on mechanisms and so on. Of course, we do not expect that at all, and our margin uplift is really something coming from a lot of different factors, but mainly also internal productivity, our footprint closing down, factories moving around. It is a very solid margin uplift we are seeing. As I also said, we expect to be able to reach the target of the 10%. So, feel very comfortable on the way the margin has been increased and delivered. Of course, we need to and have to have our eyes very, very much on price increases and so on components. Ulrik, so far, that is not a concern.
That is good to hear. Then a question on Borg Automotive. in Q3, you had slightly declining growth. Q4 implied guidance also suggests muted growth, flat at the midpoint, thereabouts. Are you adapting for a further reduction of the top line beyond Q4, or do you have initiatives in place to drive sales, and how does that match with the efficiency program that you are also having taken cost out?
Yeah, no, we are not preparing for further reductions on top line. In fact, we are sharpening our go-to-market strategy and really expect also to take share. We see a lot of turmoil in the market, and we are, as one of the bigger ones, standing rather strong. The new strategy, One Borg Go-To-Market, we have a total new sales organization in place, and so we expect really to continue to push. We see also in a very difficult market that we are taking market position and market share. So, we are preparing for continuing to grow and also expect, without disclosing too much into 2027, but I think when we came up with our Refine4Future plan, we also said that we expect a huge uplift on that. So, we expect also to drive profit uplift in 2027.
Understood. The next question on Fibertex and Environment. You had a nice uplift in year-over-year earnings, and I suspect some of it is driven by raw materials effects and perhaps also FX, but could you perhaps strip out those effects and elaborate on the underlying earnings growth, volume growth, et cetera?
Yeah, it's clear is that, as you also know, following us for a long time, that we have had a lot of issues in U.S. with new facilities, et cetera. That is really delivering profit now. So, we see a huge profit uplift in U.S. We see a much better product mix, where we, to run in new lines and new capacity and so on, we have a lot of what we call filler volume, and this filler volume is with a low margin and so on. We are getting out of that. So, product mix much better. Efficiency in U.S. improved a lot. Then in general, we also experienced a volume uplift that also delivers on the margin. So, that's an impact of a lot of things, internally things that we have worked hard on.
Understood. Then my final question on the buyback. As far as I can see, you have already spent the amount planned under the current buyback, even though it lasts until the end of the year. But you do not announce another buyback or an increase to the current one. Could you just elaborate on the rationale for this? Because it may raise speculation for further M&A opportunities or whatnot. So, would be great with some color.
Yeah. Thank you. I think let Kasper try to elaborate on that.
You are right, Ulrik. When you look at how much of the current program which has already been executed, then the amount allocated for share buybacks is more or less executed. We have not yet decided if there will be any more allocations for share buybacks. But as we told on the Capital Markets Day, share buyback is a priority for us, and we believe in the current environment, it is also good to buy back shares.
Understood. Thank you.
Thank you, Ulrik.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Emil Haargaard from DNB Carnegie. Please go ahead.
Yes, thank you for taking my questions. Most of my questions have already been answered, so only a few left. Also congrats from my side with a strong Q3, once again across all companies. So, well done. My first question is on GPV, also regarding the book-to-bill ratio in Q3. Maybe if you could elaborate on how much of the strong book-to-bill ratio reflects new customer wins versus existing customers placing new orders. Also, how should we think about the conversion of this order intake? Will this primarily be in 2028, or could we see some of this already contributing in 2027? That would be the first question.
Sorry. Thank you very much, Emil. I would say the order intake, a lot of that will materialize in 2027. Of course, also we have a longer horizon, but we have a very, very solid backlog going into 2027. On how the order intake is composed, we also have new customers coming in. In fact, for the data center segment, we had the biggest order ever to GPV from one customer, and that's very positive that we see such a big order uptake into that segment. Then also our existing, what we call AAA and AA customers, or bigger customers, they really are improving and giving stronger orders. So, across the board, we see a solid order intake, but also new customers coming in. I think also effect of that we now have a really strong global footprint with the GPV, we see effects from that also.
Perfect. Moving on to HydraSpecma, and my last question here on the new facility in China. How should we think about the ramp-up of capacity utilization? How quickly do you expect the capacity to be filled?
Very valid question, but of course, Emil, also it's project-oriented business. But of course, we are built for future also, but we see activity improving a lot, and we have also some footprint decisions to make where we are going to move production from other facilities in the footprint to China. We really put a lot of hard work in getting as much volume as possible to that facility because it's efficiency with good margins and so on. But we have built also to be able to accommodate future growth.
That is clear. That was all for me. Thank you.
The next question comes from the line of Yiwei Zhou from SEB. Please go ahead.
Hi. Can you hear me?
Yes.
Yiwei from SEB. Thank you for taking my question. I have one question left here, also on the strong order book in GPV and HydraSpecma. I appreciate your comment on the demand from data center renewable energy sectors. I was just wondering if there is any inventory build-up at your customer side due to the concern of component shortage or cost inflation. I am just trying to understand if there is any tiny effect, or we might see a reverse in the market later.
Thank you for the question. We have not built up inventory. Of course, we are cautious on securing that we have a supply chain that can deliver on the order book. So we have, of course, also to our suppliers given orders and so forth. We have not built up inventory yet, and we also work very carefully with our inventory build and our net working capital and so on. So, I think we do not see anything extraordinary. However, as I also mentioned on GPV, we have also decided that if needed be, then we are going to build inventory on a few special components if we really can get hold of them at attractive prices. So that is the strategy.
No, yes, I am asking for if you see inventory build-up at your customer side.
Oh, sorry, I misunderstood.
I am asking about the quality of the strong market demand.
We do not see any inventory buildup at customer. I think also the orders, they are solid, and we are expected to deliver them. If we look into the market, we see already we are having orders for projects already sold and being in the pipeline and built and so on. We expect no reductions in that.
Okay. Thanks for clarification. That was all for me. Thank you.
Thank you very much.
We have a follow-up question from the line of Claus Almer from Nordea. Please go ahead.
Yeah. Hi, Jens. I just have two follow-up. One is, the comment you made at GPV and the book-to-bill that a lot of the orders will come in 2027. But with the order to build of almost 2x , that sounds quite impressive growth we should expect for 2027. I know you are not guiding for 2027 yet, but maybe you can give a bit of color to this comment you gave.
Yeah, no, as I said, there is nothing unusual in having a big order book for GPV because also orders and things are very long time in the making. So we always see a solid order book, and I said that a lot of that also going into 2028, but we see good comfort in 2027 and expect also to grow. But the order book reflects not only 2027, but of course, it is very positive that you already see the orders in the book. So, yeah.
Can you give a same number if you go 12 months back? Do not recall you gave that number in Q3 2025, or maybe just end of 2025, so we can try to figure out how this book-to-bill trends over the years.
To be very honest, I cannot give it to you at hand, but maybe let's follow up on that because I want also to be precise on that. I do not have it here at hand.
Okay.
Yeah.
Then just the final one, Personal Care. You said your price mechanism has been improving. Do you still see some impact left for the price increases you have implemented, some additional uptick in the margin?
We do not. As we increase our guidance, also small effect from that, but we are back. We implemented, and that was super good because it was so volatile. So we changed from quarterly pass on to monthly, and now we are slowly going back to a quarterly pass on mechanism. So, I do not really see any impact on that.
Okay. Okay, yeah. Yes, that was all for me. Thank you so much.
Thanks a lot, Claus.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Jens Bjerg Sørensen for any closing remarks.
Thank you very much, and thank you for listening. Thank you for all the questions, and wish all of you a good weekend. Goodbye from Schouw & Co.
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