Duisburg, 11 April 2018. The family equity company Haniel looks back upon a successful 2017, both operationally and in relation to the strategic development of the portfolio. Revenue and profit exceeded expectations on financial year of 2017: This was due primarily to the performance of the leading trader of raw materials ELG and the full-service provider of washroom hygiene and textiles solutions CWS-boco. "The positive business performance, the formation of the joint venture at CWS-boco and the successful acquisitions of the attractive specialist machinery manufacturers ROVEMA and Optimar highlight the fact that we are on track for growth. Alongside our focus on the ongoing development of the portfolio, we are continuing to enhance our new and existing companies", said CEO Stephan Gemkow.
Haniel increases revenue significantly
In financial year 2017, the Haniel Group's revenue rose sharply by 14 per cent to EUR 4,138 million. In particular, this trend was fuelled by higher revenue at ELG, which was due to the more positive economic development, higher average prices for nickel and iron and an increase in output tonnage. ELG lifted its revenue by 22 per cent to EUR 1,696 million. CWS-boco's revenue increased by 21 per cent due to the first-time inclusion of the Initial activities, which were acquired on 30 June 2017, and which contributed EUR 970 million to the Haniel Group's total revenue. The Haniel Group's revenue increased organically - i.e., adjusted for currency translation effects as well as company acquisitions and disposals - by 11 per cent year on year. The revenue of all divisions experienced positive organic growth as compared to the previous year.
Sharp rise in earnings before and after taxes
Excluding the integration expenses recognised in relation to the joint venture at CWS-boco, the Haniel Group increased its operating profit by 11 per cent. In particular, major contributions came from the ELG division, which more than doubled its operating profit to EUR 49 million. Factoring in the integration expenses incurred by CWS-boco in relation to the Initial activities, as expected the Haniel Group's operating profit fell slightly to EUR 214 million. The operating profit at the B2B direct marketing specialist TAKKT also contributed to this development, as it slid below the previous year's level due to higher expenses for digitalisation, the absence of extraordinary income and a weaker US business. In contrast, Haniel realized a significant increase in profit before taxes by 22 percent: this figure rose from EUR 193 million in the previous year to EUR 235 million. The higher profit from the CECONOMY and METRO financial investments as well as the improved results from financing activities more than compensated for the slightly lower operating profit. Profit after taxes therefore rose even more significantly to EUR 248 million and was up 72 per cent compared to the previous year. This development was primarily driven by tax reforms in the US and structural effects resulting from the newly formed joint venture at CWS-boco.
Investment result after METRO demerger up significantly year on year
The demerger of the METRO GROUP resulted in greater diversification within Haniel's portfolio. The financial investments created through the demerger - CECONOMY and METRO - improved their revenue slightly in the past financial year. This development, combined with lower-than-expected restructuring expenses, led to an increase in the investment result. That figure rose year on year by 74 per cent to EUR 80 million in financial year 2017. The result from financing activities also increased compared to the previous year's level due to improved financing conditions.
Sound financial position creates leeway for portfolio development
Even after 2017's successful investments, the Haniel Group has further investment potential. The equity of the Haniel Group rose from EUR 4,248 million as at 31 December 2016 to EUR 4,499 million as at 31 December 2017. Despite the higher balance sheet total, equity ratio increased slightly from 60 per cent to 61 per cent. With more than EUR 800 million available, Haniel currently has considerable financial resources to further develop its portfolio. The primary focus rests on business combinations and on cultivating existing investments as well as ROVEMA and Optimar, which were added to the portfolio in 2017. "Both companies are highly innovative and have established business models. They keep pace with global megatrends and offer enormous potential for growth - both organically and through acquisitions. We want to work together with the respective management teams to drive their development forward", said Haniel CEO Stephan Gemkow.
Focus on growth at CWS-boco, ROVEMA and Optimar
Haniel's family-equity approach means supporting the portfolio companies in tackling specific core issues which are defined individually for each division and cultivating them to become market leaders. The objective is to create a portfolio of up to ten investments. Following the integration of key Initial activities, CWS-boco is stronger: the company can provide comprehensive customer-oriented service offerings and outstanding operating performance. Specific benefits of the deal include economies of scale in the area of procurement as well as expanded and optimised locations and logistics organisations.
ROVEMA, a premium manufacturer of packaging machines and equipment, has been part of the Haniel Group since 30 November 2017. The company has a global presence and offers a broad product range; over the medium term, it intends to double its revenue to over EUR 200 million through organic and accretive growth. The primary fields of application for ROVEMA machines to date are in the packaging of foodstuffs in a variety of consistencies such as powders, chunky products, frozen goods, and liquid products. It is likely that everyone has at some point held in their hand a product that has been safely and hygienically packaged by a ROVEMA machine, such as baby food, sweets or snacks. The company's international customer base includes virtually every leading brand manufacturer in the food sector. However, ROVEMA is already active in the non-food area, as well, and plans to expand further into this segment. In addition, regional expansion, for instance into Asia, and the increasing pace of automation and digitalisation in the packaging process offer further opportunities. For example, in 2017 P@ck-Control, the first control system with a fully-integrated robotics concept in control technology, was brought to market. The new ROVEMA Human Machine Interface (HMI), the user interface for the machines, is intuitive and user-oriented. The concept has received the Red Dot Award.
Optimar, one of the world's leading companies for automated fish handling systems, has been part of the Haniel Group since 20 December 2017. This rapidly growing company is able to offer its customers from the fishing industry and aquaculture operators an end-to-end range of products and solutions from a single source: from transport to handling through to palletising.
Optimar also aims to achieve an organic increase in revenue to above EUR 200 million over the medium term. Several megatrends support the business model: the rising demand for protein, increasing prosperity and advancing automation within industrial value chains can help to propel the company's sustainable growth. In addition to the expansion of international production capacities, Optimar's focus on innovative products is expected to further cement its role as a leading innovator. As part of the digital transformation of its business, Optimar is already working to develop special offers and services. The increasing use of data analytics and augmented reality solutions makes it possible to better assist customers in maintaining their equipment, even at high sea, thus optimising operation times. Additional opportunities will arise as a result of optical recognition systems, as these render it possible to further automate, accelerate and improve upon fish handling processes.
Digital Journey gathers speed
The Haniel Group's digital transformation picked up the pace in 2017. As a family-equity company, Haniel offers its divisions tangible support for their digital transformation and platforms for exchange which enable them to learn from each other. More than 50 projects have been implemented together with Schacht One, the Group's own digital unit at the Zollverein Coal Mine Industrial Complex in Essen. The fello.online digital service was therefore developed with CWS-boco to enable customers to rent workwear quickly, easily and effortlessly. ELG offers an online portal through which owners of scrap can find customers for their waste metals scrap at any time - regardless of quantity, quality and location.
In the newly formed newport Group, TAKKT bundles online business activities with TAKKT's venture capital activities under one roof. In addition, TAKKT creates state-of-the-art working environments with modern infrastructure, which promotes cross-divisional collaboration and communication.
Expanding the horizon, learning about new business models, networking with the founders and digital scene, insight into start-ups aiming to solve pressing social challenges: opportunities for doing so are provided by a special, comprehensive training programme offered by the Haniel Academy, the investments in selected venture capital funds and the incubator for social entrepreneurs, the Social Impact Lab at Franz-Haniel-Platz. "The digital transformation requires a fitting mindset. Cultural change is also accelerated by new executives", said Stephan Gemkow. All divisions are also increasing staffing to achieve this - across all levels of the organisation.
Haniel expects to remain on track for further growth in 2018
Haniel is anticipating a significant single-digit percentage increase in revenue in financial year 2018. Every division is expected to contribute to this increase, as is the initial full-year inclusion of the Initial companies in CWS-boco as well as the new ROVEMA and Optimar divisions. In addition, Haniel is counting on a significant increase in operating profit. It is also assumed that the investment result from the financial investments in CECONOMY and METRO will be significantly above the previous year's level, and correspondingly, that profit before taxes should also come in significantly higher.
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