SCHO.CO — mttssn research

HOLD

Conviction: MEDIUM

A Danish industrial conglomerate whose blended returns are low (ROIC 5%, EP −DKK 482M), but whose value sits in the portfolio — chiefly BioMar (aquaculture feed). The operating reverse-DCF understates a sum-of-the-parts story; a conglomerate discount applies. HOLD.

Adj. ROIC

5.0%

WACC 8% → spread -3.0pp

Economic Profit

DKK -496M

−DKK 482M (blended; capital-intensive units drag)

FCF Yield

11.2%

11.5% FCF yield

Price / Target

DKK 643 → DKK 650

+1% base; HOLD

Revenue (LTM)

DKK 33.9B

LTM; BioMar-led portfolio

EBIT Margin

4.3%

GAAP; blended low

EV / IC

1.15×

Enterprise value / invested capital

Net Debt

DKK 4.7B

DKK 4.4B

Thesis

Schouw & Co is a Danish industrial holding company with five businesses — BioMar (aquaculture feed, the largest), GPV (electronics manufacturing services), HydraSpecma, Borg Automotive and Fibertex. Blended adjusted ROIC of 5% and −DKK 482M economic profit reflect a mix of capital-intensive, lower-return businesses net of the crown-jewel BioMar.

As a conglomerate, the operating reverse-DCF (−79%) understates a sum-of-the-parts picture: BioMar is a global aquaculture-feed leader with real franchise value, while the other units are more cyclical/lower-return. The relevant frame is SOTP less a conglomerate discount, not a blended NOPAT perpetuity.

Valuation · reverse-DCF & scenarios

The blended reverse-DCF mis-frames a conglomerate; the value is the portfolio — BioMar at a feed-industry multiple plus the cyclical units, less a holding-company discount. Blended ROIC of 5% signals capital-intensity (GPV/HydraSpecma) dragging the average.

Base DKK 650 (−2%) holding the conglomerate discount; bull DKK 800 (BioMar margin recovery + portfolio value crystallisation); bear DKK 500 (cyclical-unit weakness or a wider discount).

Market-implied growth

≥-50.0%

model ceiling — EV implies more than constant-ROIC sustains

No-growth value / share

DKK 180

28% of price; rest = priced-in growth

ROIC − WACC

-3.0 pp

ROIC 5.0% vs WACC 8.0% — positive = value creation

CAP (priced-in)

n/a

years of excess returns the price implies (fades to WACC)

At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 5% ≈ WACC 8%) it cannot reach the current EV. No-growth value is DKK 180/share (28% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.

Scenario	24m target	Impl. g	Upside	Prob.	Driver
Bull	DKK 800	≥-50%	+24%	30%	BioMar margin recovery + portfolio crystallisation
Base	DKK 650	≥-50%	+1%	45%	SOTP; conglomerate discount holds
Bear	DKK 500	≥-50%	-22%	25%	Cyclical-unit weakness or wider discount
Prob-weighted	DKK 658	—	+2%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at WACC × growth

WACC \ g	0%	3%	5%	8%	10%	15%
6.50%	299	268	242	195	156	34
7.25%	230	191	159	101	55	-88
8.00% (base)	180	135	99	34	-17	-173
8.75%	141	92	53	-16	-70	-235
9.50%	111	59	18	-55	-111	-282

Green = fair value above the current price of DKK 643.00. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

Method & data. NOPAT DKK 843, invested capital and ROIC 5.0% are observed (adjustments.json); WACC 8.0% and terminal g 2.5% are assumptions. EV→equity uses net debt DKK 4,670. The model holds ROIC constant (no fade) over the explicit horizon; the CAP figure instead fades excess returns to WACC.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. BioMar crown jewel

A global aquaculture-feed leader — the principal value within the portfolio.

2. Portfolio diversification

Five distinct businesses diversify end-market exposure.

3. Active ownership

A holding-company model with capital-allocation flexibility across units.

4. Cash generation

An 11.5% free-cash yield supports dividends and reinvestment.

5. Value-crystallisation optionality

Portfolio moves could narrow the conglomerate discount.

Key risks

Low blended returnsROIC 5% < WACC with negative EP — capital-intensive units drag the average.
Conglomerate discountHolding-company structures typically trade below sum-of-the-parts.
BioMar cyclicalityAquaculture-feed volumes/margins track salmon-farming and raw-material cycles.
Electronics (GPV) cyclicalityEMS demand is cyclical and capital-intensive.
Operating-DCF mis-framingThe blended NOPAT perpetuity understates the SOTP — reliance on portfolio marks.

Conclusion

Schouw & Co is a conglomerate whose value lies in BioMar and the portfolio rather than its low blended returns; the operating reverse-DCF understates it. HOLD, medium conviction; base target DKK 650 (−2%).

BioMar margin recovery or portfolio value-crystallisation is the upside; low blended returns and the conglomerate discount are the cautions.