Press Releases

Haniel in investment mode

04/13/2015

  • Successful sale of Celesio generates EUR 2 billion in proceeds
  • Holding company essentially debt-free
  • Haniel has upwards of EUR 1 billion at its disposal for business acquisitions
  • Group revenue increases by 10 per cent to nearly EUR 4 billion
  • Operating profit increases by more than 30 per cent

Duisburg, 13 April 2015. Haniel has successfully strengthened its financial basis by selling off the Celesio division. "We now have sufficient financial leeway to continue diversifying our portfolio, meaning that we are able to invest in new, profitable divisions at any time", said Stephan Gemkow, Chairman of Haniel's Management Board. "As a family-equity company, we pursue a long-term investment approach and are looking to implement profitable growth strategies together with our portfolio companies."

Debt reduction successful
In 2014, the Haniel Holding Company was able to significantly reduce its net financial liabilities from approximately EUR 1.6 billion in 2013 to only EUR 647 million at the end of 2014. Given that the Haniel Holding Company's financial assets (EUR 737 million) are greater than net financial liabilities, it is essentially debt-free. The proceeds from the sale of Celesio were also used to significantly reduce liabilities at the Group level from approximately EUR 3.8 billion in 2013 to just under EUR 1.4 billion as at 31 December 2014.

Significant increase in revenue
The Haniel Group posted a significant increase in revenue in 2014, rising 10 per cent to EUR 3,944 million. In addition to the positive business development, the first full-year consolidation of the companies acquired by CWS-boco and ELG in the prior year also made a contribution. Adjusted for business combinations and disposals as well as currency translation effects, the Haniel Group increased revenue by 8 per cent. This was attributable largely to the encouraging revenue trend at the ELG division, which was able to significantly increase its output tonnage in 2014 due to increased demand for stainless steel products and superalloys. Higher prices of nickel and titanium, significant raw materials for ELG's business, also made a positive contribution to revenue growth. The TAKKT division benefited from the improved general economic conditions and also generated a revenue increase. CWS-boco's revenue remained stable despite fierce competition on the market.

Operating profit improved significantly
The Haniel Group’s operating profit increased by 31 per cent from EUR 166 million to EUR 217 million. This was attributable in particular to ELG's considerable gains, but also to the positive business development at TAKKT. CWS-boco also contributed to this increase in operating profit thanks to savings in the area of operating expenses through the modernisation of its laundry network and its supply chain, as did the Haniel Holding Company thanks to non-recurring income.

Profit before taxes declined – high profit after taxes
Despite significantly higher operating profit, profit before taxes declined from EUR 117 million in the previous year to EUR 31 million. This was due to the fact that the high operating profit offset decreases in the investment result and the result from financing activities. The result from financing activities was lower in 2014 because the proceeds from the sale of Celesio were used to redeem bonds with a principal amount of EUR 413 million. The premiums paid in conjunction with this bond redemption had a negative impact on the result from financing activities in 2014. Going forward, however, these redemptions will significantly relieve pressure on the net interest result of the Haniel Holding Company.

The investment result was also down in 2014, amounting to EUR 14 million, compared to EUR 120 million in the previous year. A decisive factor here was the decrease of the investment result from the Metro investment from EUR 96 million in the previous year to EUR 14 million as a result of portfolio, currency translation and non-recurring effects as well as lower income from property sales. In addition, the Haniel Group's investment result declined year-on-year because in the previous year it included income from the disposal of two investment funds.

Group's equity ratio increased sharply
The sale of Celesio led to a reduction in equity from just under EUR 4.6 billion in the previous year to just under EUR 4.0 billion. Nevertheless, the equity ratio increased significantly as a result of the reduction in total assets – due in particular to the reduction in financial liabilities – from 34 per cent to 62 per cent, thus highlighting the Haniel Group's investment potential.

Structured search for new business divisions
The Holding Company has upwards of EUR 1 billion in funds available for company acquisitions. By positioning itself as a family-equity company, Haniel sets itself apart from other investors as an investor and a partner with a long-term strategy: Haniel combines the high degree of professionalism of a portfolio manager with the values of a tradition-steeped, family-owned company. The structured search for new business divisions is guided by megatrends and an investment filter which focuses on well-positioned, small and medium-sized enterprises which operate in attractive niche sectors and can leverage Haniel's support and expertise to expand their leading market position over the medium- to long-term. In addition, Haniel gives preference to non-listed companies in which the Holding Company can acquire a significant majority stake.

Haniel expects growth and portfolio changes in 2015
For the 2015 financial year Haniel expects that its profit before taxes will increase significantly. In addition to an expected increase in the divisions' operating profit, this development will be attributable in particular to the significant anticipated improvement in the result from financing activities. Moreover, Haniel expects the Group to generate revenue growth, adjusted for currency translation effects, in the single-digit percentage range.

The focus of the Haniel Holding Company's activities will continue to lie on its search for new portfolio companies. "New business divisions should not only make a contribution to the diversification of the Haniel portfolio, but also promise an appropriate value contribution", said Gemkow. "We strive to be enkelfähig. In line with this objective, we are mainly looking to add companies to our portfolio which stand out by virtue of their sustainable actions. We have made good progress thus far in our search and are fully confident that we will be able to make new investments in the current financial year."

 

2014 financial figures at a glance:

IFRSs (EUR million)

 2013*

2014

Change (%)

Haniel Group

 

 

 

Revenue

3,580

3,944

+10%

Operating profit

166

217

+31%

Profit before taxes

117

31

-74%

Profit after taxes

267

686

>+100%

Haniel cash flow

562

175

-69%

Cash flows from operating activities

660

-135

<-100%

Capital expenditure

298

770

>+100%

Annual average number of employees (headcount)

50,279

11,544

-77%

Net financial liabilities**

3,843

1,358

-65%

Holding Company Franz Haniel & Cie.

 

 

 

Net financial liabilities

1,586

647

-59%

CWS-boco

 

 

 

Revenue

748

751

+0%

Operating profit

64

71

+11%

Annual average number of employees (headcount)

7,527

7,529

+0%

ELG

 

 

 

Revenue

1,880

2,213

+18%

Operating profit

47

59

+26%

Annual average number of employees (headcount)

1,224

1,267

+4%

TAKKT

 

 

 

Revenue

953

981

+3%

Operating profit

96

111

+16%

Annual average number of employees (headcount)

2,551

2,528

-1%

METRO GROUP

 

 

 

Haniel investment result

96

14

-85%

 

 

 

 

 

* Prior-year figures adjusted in accordance with IAS 8.
** Including net financial liabilities held for sale.