Press Releases

Haniel holds its own in the crisis

04/26/2010

Corporate Divisions affected to differing degrees by economic developments in 2009

  • Haniel achieves profit before taxes of 160 million euros.
  • Corporate Divisions partly compensate for lower results due to re­duced sales with stringent cost management.
  • Reduction in debt in the previous year has a positive impact on the result.
  • Group’s investment volume is reduced according to plan and financed entirely from cash flow from operating activities.
  • Successful bond issues of 1.4 billion euros.

Duisburg, April 26, 2010. In 2009 the world economy suffered its deepest recession since the Second World War. In this difficult environment, the diversified Haniel portfolio proved its worth: ELG and TAKKT are directly influenced by the state of the economy, while Celesio is comparatively in­dependent of it and CWS-boco was not affected until later. “Therefore we have been in a position to balance out the consequences of the crisis within our group of companies,” declared Haniel CEO Prof. Jürgen Kluge. He believes that the recovery of the global economy will be slow, and the level of economic performance in the coming years will be substantially lower than before the crisis. “Now we have a much clearer view of the global economic road ahead and we can again move on to long-term, forward-looking activities.”

Weak economy leads to fall in sales

At 24,524 million euros, Haniel’s sales were 5 per cent below the figure of the previous year. Especially in the first half-year, the development of ELG’s operations was significantly affected by the economic crisis. Output tonnage and the nickel price revived in the second half-year. In contrast to ELG, the develop­ment of TAKKT’s operations scarcely improved in the second half-year. Sales in 2009 fell by some 26 per cent. This decline – the heaviest in the Corporate Division’s history – was mainly due to a fall in the number of orders. CWS-boco also recorded lower sales, above all due to a deterioration in business in the workwear rental sector. There were also considerable falls in the service busi­ness with flat linens for hotels in Ireland. In its other sectors, CWS-boco’s business remained comparatively stable. Celesio increased its sales slightly – especially in the prescription medicaments segment where Celesio generates the bulk of its sales.

Strict cost management

The operating result fell significantly to 289 million euros due to declines in sales at ELG, TAKKT and CWS-boco. It was burdened additionally by the develop­ment of CWS-boco’s operations in Ireland and the restructuring measures implemented there. With strict cost management and the adjustment of capacities in line with falling demand, the Corporate Divisions and investments partly succeeded in compensating for these negative effects. The comparatively stable operating profitability of Celesio also contributed to the fact that in 2009, in an extremely difficult economic environment and despite non-recurring value adjustments amounting to 294 million euros, Haniel’s result did not fall even more sharply.

Haniel’s result from its Metro investment was below the previous year’s level at 105 million euros. The causes of this were a poorer operating result in comparison to 2008, a lower financial result, and higher tax expenses.

Investment volume reduced

With a view to the global recession, the Corporate Divisions and investments had already taken the precaution of reducing their investment programmes for 2009 at the end of 2008. At 180 million euros, the volume of investment in company acquisitions was significantly lower than the previous year’s figure. Nevertheless, attractive acquisition opportunities were used purposefully in the past fiscal year. Thus, Celesio acquired Panpharma – the number one in Brazilian pharmaceutical wholesaling – and increased its shareholding in the worldwide human resources and marketing services provider pharmexx. In addition, TAKKT acquired Central Restaurant Products, a US mail order supplier of restaurant equipment. The investments were entirely financed out of cash flow from oper­ating activities, which amounted to 712 million euros.

Sources of finance diversified

Financing expenses at Haniel were reduced in 2009. Apart from lower market interest rates, positive effects arose above all from the fact that Haniel had repaid nearly 1 billion euros of debt in 2008 – mainly due to the sale of the Xella Corporate Division. In order to remain financially flexible despite the uncertainties in the capital markets, Haniel diversified its financing in 2009. In October 2009, the Group Holding Company Franz Haniel & Cie. GmbH issued a five-year euro benchmark bond. This was subscribed above all by investment funds, banks – often for further sale to private investors – and insurance companies. Demand exceeded the one-billion-euro issue many times over. Haniel sees this as a sign that outside capital providers take a positive view of the structure of the invest­ment portfolio and Haniel’s investment principles.

Responsible employer

As a family-owned company, Haniel accepts its responsibility towards its em­ployees. In the difficult economic situation, many possibilities were exploited to secure employment. In Germany for example, TAKKT intensively used the instrument of short-time working to retain jobs. The employees in all Corporate Divisions were also called upon to work off their overtime credits and to take any vacations due to them. However, these measures were not everywhere sufficient to bring capacities into line with the negative development of business. At ELG and TAKKT in particular, redundancies were necessary as a consequence of declining orders and plant closures. Despite the redundancies, the average employee headcount at Haniel rose last year, mainly due to Celesio’s acquisition of Panpharma.

Strategy process introduced

Haniel’s Managing Board views the coming fiscal year with cautious optimism and assumes that its sales and operating result will increase. Haniel again im­proved its financing and debt situation in January 2010 with the issue of another bond which was sevenfold oversubscribed. At the beginning of the year, the Managing Board also launched the strategy process “Haniel 2020”; one of the main aspects of this project is the identification of attractive investment targets.

 


Key figures for 2009 at a glance:

IFRS in million euros 

   2008*

2009

Change in per cent

Haniel Group

 

 

 

Sales

25,710

24,524

-5%

Operating result

544

289

-47%

Profit before taxes

381

160

-58%

Profit after taxes

126

17

-87%

Haniel cash flow

812

526

-35%

Cash flow from operating activities

1,007

712

-29%

Capital expenditures

1,015

478

-53%

Annual average number of employees (headcount)

49,143

53,243

+8%

Celesio

 

 

 

Sales

21,167

21,497

+2%

Operating result

269

223

-17%

Annual average number of employees (headcount)

37,744

42,022

+11%

CWS-boco

 

 

 

Sales

779

750

-4%

Operating result

97

33

-66%

Annual average number of employees (headcount)

7,872

7,901

+/-0%

ELG 

 

 

 

Sales

2,833

1,546

-45%

Operating result

117

40

-66%

Annual average number of employees (headcount)

1,113

982

-12%

TAKKT 

 

 

 

Sales

932

732

-21%

Operating result

117

49

-58%

Annual average number of employees (headcount)

2,143

2,064

-4%

METRO Group 
(major investment) 

 

 

 

Haniel’s investment result

156

105

-33%

 

* Previous year’s figures adjusted according to IAS 8.26. For this reason, figures may differ from those published in the 2008 Annual Report.