Schouw & Co (SCHO) Q4 2024 earnings summary

Executive summary

• Revenue declined 7% to DKK 34.7 billion in 2024, mainly due to lower input costs and activity levels, but EBITDA reached a record high, up 3% to DKK 2.93 billion.

• Cash flow from operations rose 44% to DKK 2.5 billion, and net working capital was reduced by DKK 450 million, with inventories down from DKK 8.0 billion to DKK 7.2 billion.

• Net interest-bearing debt fell 15% to DKK 5,376 million, with leverage now well below 2x EBITDA.

• Prudent investments and significant shareholder returns through dividends and buybacks, totaling DKK 644 million.

Financial highlights

• Cash flow from operations rose 44% to DKK 2,553 million, and ROIC (excluding goodwill) improved by 0.2pp to 13.0%.

• Net working capital settled at DKK 6.77 billion, with ongoing focus on further reductions.

• NIBD/EBITDA improved from 2.2x to 1.8x year-over-year, within the target range of 1.0-2.5x.

• CapEx in 2024 was DKK 685 million, with expectations for slightly higher or maintenance-focused CapEx in 2025.

• Emissions (scope 1 and 2) reduced by 5% to 205,000 tonnes CO2e.

Outlook and guidance

• Group turnover for 2025 is expected in the range of DKK 33.4-35.9 billion, with EBITDA guidance of DKK 2.82-3.12 billion and EBIT of DKK 1.68-1.98 billion.

• CapEx in 2025 will focus on maintenance and finalizing ongoing projects, including upgrades in Fibertex Nonwovens.

• Most portfolio businesses expect stable or improved EBITDA in 2025, except Fibertex Personal Care, which anticipates continued challenges.

• Cautiously optimistic outlook for 2025, supported by a well-invested platform and strong customer relationships.