Press Releases

Haniel successfully restructures portfolio

08/31/2015

  • Bekaert Textiles added in June as new division
  • Haniel reduces interest in METRO GROUP to 25 per cent and places exchangeable bond
  • Metro agrees on sale of Kaufhof
  • Revenue and operating profit weighed down by cyclical ELG business
  • CWS-boco intensifies sales initiative
  • TAKKT profits from good business in the USA
  • Debt reduction leads to significant increase in profit before taxes

Duisburg, 31 August 2015. Efforts to shape Haniel's portfolio are advancing. The acquisition of Bekaert Textiles and the further reduction in the Metro investment represent the successful completion of key steps towards restructuring Franz Haniel & Cie. GmbH (Haniel)'s portfolio. The active search for additional new divisions continues. From an economic point of view, the Haniel Group performed well in a somewhat difficult market environment in the first half of 2015. TAKKT generated encouraging growth, particularly in the United States, while ELG was down year on year as a result of difficult conditions in the stainless steel market segment.

Expanded financial leeway, new companies in focus
In the first half of 2015, Haniel successfully expanded its financial leeway: On the one hand, the Holding Company took advantage of the attractive capital market environment to issue an exchangeable bond linked to Metro shares. On the other, Haniel further reduced its interest in METRO GROUP, thus further balancing its portfolio. "Haniel will continuously expand its portfolio by using this sound financial footing to acquire additional companies", said Stephan Gemkow, Chairman of Haniel's Management Board. "The acquisition of the internationally successful Bekaert Textiles represented a first key step."

Heterogeneous market environment for the Haniel Group
The global economy continued along a restrained growth course in the first half of 2015 – although that course varied greatly by region. Growth in the United States was greater than in Europe, as in the preceding year. In addition to the macroeconomic environment, the conditions in the stainless steel market segment are of great significance to the Haniel Group. Conditions in the first half of 2015 were considerably worse than in the same period in the previous year, having an immediate effect on ELG. One key factor was the price of nickel, a commodity which is highly significant for this division: this was down year on year by an average of 17 per cent. The difficult market conditions for ELG's stainless steel business resulted in the Haniel Group's revenue falling by 2 per cent overall in the first half of 2015, to EUR 1,982 million. By contrast, TAKKT and CWS-boco increased their revenue as compared to the first half of 2014. TAKKT recorded encouraging growth particularly in the United States.

Operating profit declined slightly
The Haniel Group's operating profit amounted to EUR 109 million, down slightly as compared to the previous year's EUR 116 million. TAKKT and CWS-boco generated improved profits, although this was not enough to completely offset the weaker earnings of the ELG division, whose operating profit was negatively impacted by reduced output tonnage and considerably lower prices for nickel. The newly acquired Bekaert Textiles division made a positive contribution to revenue and profit for the first time in June 2015.

Profit before taxes significantly higher
Profit before taxes increased from EUR -120 million to EUR 13 million. This is attributable to an improved result from financing activities as well as to an increased result from the Metro investment.
The result from the METRO GROUP investment improved from EUR -97 million in the previous year to EUR -60 million in the first half of 2015. With a view to the negative investment result in the first half year, it should be taken into account that the essentially positive contribution to earnings from the METRO GROUP regularly does not occur until the Christmas season during the fourth quarter of Haniel's financial year. Although the business development of the METRO GROUP in the first half of 2015 indicated an increase in revenue adjusted for business combinations and disposals as well as currency translation effects, the operating profit decreased as a result of greater one-off expenses. The strategic realignment of the METRO GROUP has made a further step forward, primarily as a result of the agreement on the sale of the Galeria Kaufhof sales division.

With respect to the result from financing activities, Haniel benefited from the systematic debt reduction measures implemented in previous years: thanks to the lower debt level, finance costs fell considerably. In addition, the Holding Company had incurred an extraordinary reduction in profit in the previous year as a result of the bond redemptions.

ELG lowers outlook
"We expect all divisions to continue their positive development in this financial year, with the exception of ELG", said Gemkow. ELG's revenue and operating profit are expected to be down sharply year on year due to the persistently unfavourable market conditions in the stainless steel segment, primarily as a result of the significantly lower price of nickel. By contrast, CWS-boco continues to anticipate slight increase in revenue for financial year 2015 and is working with stepped-up sales initiatives to win over additional new customers. TAKKT continues to expect a positive business trend in financial year 2015, particularly in the United States. Since it will not be possible for the other divisions and the newly acquired Bekaert Textiles to compensate for the reduction in ELG's revenue and profit, Haniel's Management Board is lowering its forecast for revenue and operating profit for the current financial year. However, the Management Board continues to expect that profit before taxes will increase sharply due to the anticipated significant improvement in net financial income.

Overview of the figures for the first half of 2015:

 

IFRS (EUR million)

 30/06/2014

30/06/2015

Change

Haniel Group

 

 

 

Revenue

2,022

1,982

-2%

Operating profit

116

109

-6%

Profit before taxes

-120

13

 >+100%

Profit after taxes (continuing operations)

-152

-21

+86%

Profit after taxes

564

-21

<-100%

Haniel cash flow

64

204

>+100%

Bekaert Textiles* (equity interest 100%)

 

 

 

Revenue

0

20

 

Operating profit

0

2

 

Employees (average headcount)

0

1,498

 

CWS-boco (equity interest 100%)

 

 

 

Revenue

371

382

+3%

Operating profit

35

36

+3%

Employees (average headcount)

7,484

7,574

+1%

ELG (equity interest 100%)

 

 

 

Revenue

1,180

1,074

-9%

Operating profit

30

11

-63%

Employees (average headcount)

1,257

1,301

+4%

TAKKT (equity interest 50.25%)

 

 

 

Revenue

471

506

+7%

Operating profit

56

65

+16%

Employees (average headcount)

2,542

2,348

-8%

METRO GROUP (equity interest 25.00%)

 

 

 

Haniel investment result

-97

-60

+38%

 

 

 

 

* included in the Haniel Group since beginning of June.


You will find the complete Half-year Financial Report online.