Dalhoff larsen horneman a s 3 juni 2008
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Den Danske Finansanalytikerforening. Dalhoff Larsen & Horneman A/S 3. juni 2008. Jørgen Møller-Rasmussen, CEO Claus Mejlby Nielsen, Vice President Treasury & IR . CONTENTS. General presentation 3 Q 1 2008, Group12 Outlook 200818 Renewed strategy22

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Dalhoff larsen horneman a s 3 juni 2008

Den Danske Finansanalytikerforening

Dalhoff Larsen & Horneman A/S 3. juni 2008

Jørgen Møller-Rasmussen, CEO

Claus Mejlby Nielsen, Vice President Treasury & IR


Contents

CONTENTS

  • General presentation 3

  • Q 1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


Contents1

CONTENTS

  • General presentation3

  • Q1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


In short

Forecast group revenues of DKK 5.7 billion in 2008

Largest producer of sustainable tropical hardwood in Africa

>85% of DLH’s revenues are generated outside Denmark

Strategic focus on interna-tional B2B timber trade after divestiture of building- materials-chain in DK to Saint-Gobain

Sales and procurement offices, warehouses and processing facilities in 31 countries on 5 continents

Approx. 3,600 employees

Listed in Copenhagen since 1986

Market cap DKK 1.4 billion (EUR 175 million)

IN SHORT

One of the world’s major timber wholesalers


International timber trade

INTERNATIONAL TIMBER TRADE

Global sourcing, processing, trading and distribution of tropical and tempered hardwood products and

timber-based sheet materials

and softwood.


From the forest to the end user

FROM THE FOREST TO THE END-USER

X


Trends therefore

TRENDS THEREFORE

Focus on emerging markets

Further globalisation

More own processing

Economies of scale via growth and efficiency measures (IT)

Focus on sourcing

  • The consumption of timber is growing (most in the emerging markets, relatively)

  • International division of work increases cross-border trade

  • Processing moves upstream in the value chain

  • The market is getting more transparent

  • Shortage of raw materials


House of values

HOUSE OF VALUES


Corporate social responsibility csr

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Environment ∙ Human rights ∙ Social responsibility

  • Good Supplier Program

  • Enhanced efforts to introduce sustainability in the DLH Group’s businesses

  • Now the worlds largest supplier of certified tropical hardwood

  • Dialogue and cooperation for human rights


Stepwise implementation of fsc tropical hardwood

STEPWISE IMPLEMENTATION OF FSCTropical Hardwood

12%

  • Separate CSR-publication as at 17 March 2008

  • Leading position worldwide in sustainable tropical hardwood

  • 2nd forest concession in CIB, Congo, FSC certified

Certification – FSC/PEFC

20%

Verified Legal Compliance VLC/TLTV

24%

Verified Legal Origin – VLO

80%

Known origin

100%

Known and unknown origin


Dividend and share buy back

DIVIDEND AND SHARE BUY-BACK

DKK/share of DKK 10

  • Share buy-back programme

  • Launched 26 May 2008

  • Up to DKK 100 million (7% of B-cap.)

  • ”Safe-harbour”-method

  • Ends 1 March 2009

  • At a later stage DLH can issue new shares in connection with major acquisitions

Financial year


Contents2

Agenda

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Guide

CONTENTS

  • General presentation3

  • Q 1 0812

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


Group income statement

GROUP INCOME STATEMENT


Revenue developement q1 2008

Revenue Developement Q1 2008

DKK million

-155


Invested capital

INVESTED CAPITAL

All operations

end of 2007

Continuing Operations

end of Q1 2008

3.234

3.234

2.914

Anlægsaktiver 729

2.914

Egenkapital1.068

Non-current assets 907

Equity1.172

Non-current assets 799

Equity

1.747

Netto-omsætnings-aktiver 2.143

Current Assets 2.115

Current Assets 2.327

Interest bearing debt2.062

Interest bearing debt1.166

DKK million


Cash flow continuing operations

CASH FLOWContinuing operations

Discontinued operations 923 -2


Summary q1 2008

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Summary Q1 2008

  • Overall picture: Weak market in Q1

    -due to lower building activity

    -and an overstock situation in the market

    -hence declining prices

    - reduced turnover

    -and decreased EBIT-Margin

    -and high inventories

  • However a number of satisfying markets

    (e.g. Middle- & Far East, France, Eastern Europe, Sweden)

  • Successful divestment of Building Materials Division to Saint Gobain Large one-off income item


Contents3

Agenda

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Guide

CONTENTS

  • General presentation 3

  • Q1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


Forecast for 2008

FORECAST FOR 2008


Profit before tax

PROFIT BEFORE TAX

DKK million

580


Average invested capital

AVERAGE INVESTED CAPITAL

DKK million


Contents4

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Guide

CONTENTS

  • General presentation3

  • Q1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


Equity story

EQUITY STORY

  • Industry with growth potential

  • Strong business concept

  • Strong environmental profile

  • Considerable economies of scale

  • Structural opportunities


Business basis 2008

BUSINESS BASIS 2008

Future

market mix

Future

business mix

Denmark14%

Other Nordic

countries15%

Bygge-materialer23%

Bygge-materialer23%

Emergingmarkets23%

Softwood & sheet materials30%

Hardwood70%

Other Western European countries 40%

USA8%

Træ &plade18%

DKK 5.6 billion

DKK 5.6 billion

(percentage distribution of revenue)


Renewed strategy

RENEWED STRATEGY

The new DLH – one of the world’s leading timber wholesalers

  • Full focus on the international B2B trade with timber and timber products

  • Strengthened efforts to implement sustainability in DLH group units

  • Rapidly proceeding towards a market position as the world’s leading supplier of certified tropical hardwood

  • Strategic extension of the value chain:”From forest to end user”

  • Enlarged security of supply in the long term


Value chain

VALUE CHAIN

Hardwood

Softwood

Sheet Materials

Forest

Sawmill

Pro-cessing

Export

Import

Distri-bution

End customer


Contents5

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Guide

CONTENTS

  • General presentation 3

  • Q1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


New financial goals group

NEW FINANCIAL GOALS - GROUP

*) ”…an aggregated growth during the strategic period which more than

compensates the divested activities”.


New financial goals segments

NEW FINANCIAL GOALS - SEGMENTS


Contents6

Agenda

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Guide

CONTENTS

  • General presentation 3

  • Q1 2008, Group12

  • Outlook 200818

  • Renewed strategy22

  • Renewed financial goals27

  • M&A activities30


Dalhoff larsen horneman a s 3 juni 2008

M&A

  • Acquisitioncandidates in a fragmented market

  • Multiples based on EVA approach

  • New share capital will only be issued to finance specific acquisitions


Bohmans november 2005

BOHMANS, NOVEMBER 2005

Turnover: DKK 250 million


Tt timber group january 2006

TT TIMBER GROUP, JANUARY 2006

Turnover: DKK 1.300 million


Ljungbergs september 2006

LJUNGBERGS, SEPTEMBER 2006

Turnover: DKK 300 million


Olle zettergren july 2007

OLLE ZETTERGREN, JULY 2007

Turnover: DKK 80 million


Hustvedt gruppen august 2007

HUSTVEDT-GRUPPEN, AUGUST 2007

Turnover: DKK 140 million


Palma february 2008

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Guide

PALMA, FEBRUARY 2008

Turnover: DKK 100 million


Puukeskus oy may 2008

PUUKESKUS OY, May 2008

Hardwood activities only


Further information

FURTHER INFORMATION

  • Stock Brokers monitoring DLH

    • Danske Equities, Copenhagen

    • Nordea, Copenhagen

    • Kaupthing Bank, Copenhagen

  • Website (incl. investor presentations):

    www.dlh-group.com

  • IR-contact:

    [email protected]


Www dlh group com

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Guide

www.dlh-group.com


Competition

COMPETITION

  • No similar worldwide competitors

  • Regional players e.g.

    • Tradelink (Brazil  Europe, US)

    • Denker (SEA  NL, Germany)

    • Rougier (Africa  France)

    • Danzer (Africa  Germany etc.)

  • Large customers having own procurement organisation

  • Large producers having own sales agents.


Share based incentive schemes

SHARE BASED INCENTIVE SCHEMES

  • Revolving share option programme for Group Management - 6 individuals(1% of outstanding shares)

  • Employees share programme issued in 2006 (1.3% of market value)


Segmentation 2007

SEGMENTATION 2007

  • Revenue 2007 DKK 7,4b

  • F 2008 DKK 5,6b

    EBIT margin 2007 4,3%

  •  F 2008 2,9%

SOLD

Building materials23%

Hardwood55%

Timber & Board22%

(% of revenue)


Risks

RISKS

  • Commercial risks

    • Market and customer risks (Cyclical business)

    • Political risks and other supply risks (3rd world countries)

  • Financial risks

    • Foreign exchange rates (USD vs. EUR)

    • Interest rates and funding

  • Balance sheet risks

    • Inventories (Market prices)

    • Trade receivables

    • Prepayments to suppliers

  • Environmental and human rights matters (Compliance and reputation)


Renewed strategy forestry

Renewed strategy:FORESTRY

  • New investments in forests

    - Normally concessions and sawmills, exceptionally ownership of land

    - Cooperation with investors about investments in plantation, will become

    an important parameter in the CO2/climate solutions

  • Strategic necessity in certain tropical areas

  • Only in the Hardwood Division and presently only in Congo and Gabon

  • Supports the commercial interest regarding:

    - Supply security

    - Environment/sustainability (certification)

    - Test of new species


Share performance

SHARE PERFORMANCE


Trading volume

TRADING VOLUME


Shareholders

SHAREHOLDERS


Renewed strategy processing

Renewed strategy:PROCESSING

  • New investments in processing

  • Often required precondition for own forest concessions

  • Only in Hardwood Division, predominantly in (7) supply countries

  • Typically kiln-drying and production of semi-finished goods, including a few finished products (f.inst. decking and flooring)

  • Supports commercial interests:

    - Environment and sustainability

    - ”Market leadership” in the supply part

    - Completes the supply chain

    - Able to buy ”mill-run” from external sawmills


Renewed strategy trading

Renewed strategy:TRADING

  • Organic growth without capital investments

  • Innovated focus in both divisions

  • Back to back businesses with limited tied up capital

  • Supports the commercial interests regarding:

    - Markets without DLH distribution activity

    - Introduction to new markets

    - Utilization of imbalances in international trade

    - Sales channel for surplus of own production


Renewed strategy distribution

Renewed strategy:DISTRIBUTION

  • The major part of the investments will be within distribution

  • Both strategic acquisitions and minor add-on purchases

  • Acquisition of sales units with own inventory in both divisions

  • Also in new countries

    - In Hardwood Division global perspective

    - In Timber & Board Division in geographic connection to existing areas

  • Focus areas

    - Nordic countries

    - Western Europe

    - USA

    - Emerging markets


Renewed organisation organisation

Renewed organisation:ORGANISATION

  • Continuously two divisions

  • New regionalized geographical structure

  • To support the integrated business model, strengthening of cross-group coordination:

International relations

Environment/CSR

Shipping

HR

Marketing

Logistic

Production

  • Search for new member of Group Executive Board

  • Focus on implementation of new IT system (GTS) and the relating organisational adjustments


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