Franz Haniel & Cie. GmbH
Franz Haniel & Cie. GmbH: Haniel generates significant growth in all earnings figures (news with additional features)

Dietmar Bochert Director of Communications
T	+49 203 806-578
F	+49 203 80680-578
M	+49 170 3312996
E	dbochert@haniel.de
10 April 2017

 

Haniel generates significant growth in all earnings figures

– 19 per cent increase in operating profit

– Buy-and-build strategy at BekaertDeslee and CWS-boco a success

– Portfolio value rises by 8 per cent

– More than EUR 1 billion still available for business acquisitions

– Digital initiative making progress

– Two investment-grade ratings received

Duisburg, 10 April 2017. The family-equity company Haniel improved all of its earnings figures in financial year 2016: Its operating profit grew by 19 per cent to EUR 229 million. This growth was attributable to all divisions. “The positive earnings performance and the increase in the value of the portfolio demonstrate that our buy-and-build strategy for diversifying the portfolio has been a success. In addition, the two investment-grade ratings encourage us to continue to systematically pursue our conservative financial policy and long-term investment strategy”, said CEO Stephan Gemkow.

Milestones towards value-increasing portfolio development
Haniel achieved several highly encouraging milestones in 2016: The Company successfully assisted Bekaert Textiles in acquiring and integrating the DesleeClama Group. The division, operating since then under the name BekaertDeslee, thus strengthened its position as a leading specialist in the manufacturing of mattress textiles, and was able to tap into new regions. For the CWS-boco division, Haniel signed an agreement on 15 December 2016 concerning the takeover of significant parts of Rentokil Initial’s central European business in the areas of hygiene, workwear and cleanroom services. This will bolster CWS-boco’s market position in the long run and – subject to approval by the antitrust authorities – create a leading European company offering greater innovative strength, customer proximity and efficiency. The project to demerge the METRO GROUP is also making swift progress. In addition to the resulting growth momentum, Haniel will benefit from the improved diversification of its investment portfolio. Furthermore, the Supervisory Board increased the size of Haniel’s Management Board, appointing Thomas Schmidt as the third member with effect from 30 January 2017. He will begin by overseeing the planned integration of Rentokil Initial with CWS-boco and then assume chairmanship of the Shareholder Committee for the planned joint venture.

All divisions with increase in earnings
Haniel significantly improved its operating profit in financial year 2016: that figure increased by 19 per cent to EUR 229 million. This improvement was attributable to all divisions, and primarily to the positive development at TAKKT and the initial inclusion from BekaertDeslee over a full financial year. CWS-boco also realised a slightly higher operating profit. The raw materials dealer ELG also improved its operating profit significantly year on year.

Metro posts increase in operating profit – one-off factors burden
In financial year 2016, the METRO GROUP generated an increase in its operating profit before one-off factors, from EUR 1,448 million to EUR 1,553 million. However, Haniel’s investment result fell from EUR 57 million to EUR 46 million due to additional one-off factors, particularly in connection with the group’s upcoming demerger.

Significant rise in profit after taxes
Profit before taxes increased sharply from EUR 174 million in the previous year to EUR 193 million. With a slightly lower tax expense compared to the previous year, the profit after taxes was also significantly above that of 2015. This figure increased by 20 per cent from EUR 120 million in the previous year to EUR 144 million in the 2016 financial year.

Division revenue positive – down only at ELG due to prices of raw materials
Overall, the Haniel Group posted revenue of EUR 3,620 million in 2016, which corresponds to a decline of 2 per cent. Acquisitions had a positive effect on total revenue. First and foremost, the first-time inclusion of BekaertDeslee for a full financial year and the integration of the DesleeClama Group since its acquisition on 29 February 2016 made positive contributions to revenue development. Adjusted for business combinations and disposals as well as currency translation effects, revenue was down year on year by 7 per cent. This was attributable to lower commodity prices and less output tonnage being produced by the division ELG. The revenue of all other divisions developed positively compared to the previous year. The revenue effects resulting from organic growth at TAKKT bear noting in particular.

Sound financial position underscores investment potential
Haniel’s equity increased from EUR 4,169 million as at 31 December 2015 to EUR 4,248 million as at 31 December 2016, particularly as a result of the increase in profit after taxes. The equity ratio declined arithmetically from 61 per cent to 60 per cent because not only did equity increase, but so, too, did total assets. The Group’s strong equity base underpins its investment potential. At present, Haniel continues to have more than EUR 1 billion available, providing it with considerable financial resources to expand its portfolio. Aside from acquisitions of companies, the focus continues to lie on increasing the value of the existing portfolio companies. “Our objective is to serve as a value developer for our investments and to keep our eyes on not only value but also values. We will continue to patiently and prudently weigh options as they present themselves and find the right companies for our portfolio, even in a challenging market environment”, said Stephan Gemkow.

Digital initiative making progress
As a family-equity company, Haniel also offers added value to its divisions when it comes to digital transformation. For instance, each division has developed a Digital Agenda, which is implemented with the valuable support of the Group’s Schacht One digital unit at the tradition-steeped Zollverein Coal Mine in Essen. Moreover, investments in selected venture capital funds provide opportunities to get to know new business models and network with the venture capital and digital scene. This approach puts Haniel in a position to leverage opportunities provided by digital transformation as they arise.

Investment-grade rating from Scope and S&P
The European rating agency Scope assessed Haniel’s creditworthiness for the first time in February 2016. It gave Haniel a BBB- rating with a stable outlook, placing it within the investment-grade range. Scope thus acknowledged Haniel’s conservative investment strategy as well as its strong liquidity position and solid cash flow profile.
In April 2016, Standard & Poor’s (S&P) raised its rating from BB+/B (positive outlook) to BBB-/A-3 (stable outlook). Haniel is thus once again classified as investment grade at S&P. In January 2017, Moody’s raised its outlook on Haniel’s rating to “positive” and confirmed the Ba1 rating. The steps taken as part of the investment strategy and the expected positive effects on Haniel’s portfolio resulting from the announced demerger of the METRO GROUP were key factors in determining the rating and outlook.

Haniel anticipates an increase in operating profit for 2017

On an aggregate basis, Haniel’s Management Board believes that the Group will see a slight increase in revenue adjusted for acquisitions and currency translation effects in the 2017 financial year. All divisions are expected to contribute to this forecasted increase. It is also assumed that operating profit will increase slightly. It must be noted in this context that this forecast for the Group’s profit depends greatly on the earnings contribution from the ELG division, which operates on volatile commodities markets. In addition, the current estimate of revenue and earnings development will be affected by CWS-boco’s planned takeover of portions of Rentokil Initial’s central European business, which is subject to the approval of the relevant antitrust authorities. Haniel expects that its financial result will improve in 2017 and – due to effects from the demerger – it anticipates a lower investment result from Metro. Nevertheless, both the profit before and after taxes are expected to be at least at the same level as during the previous year.

 

2016 financial figures at a glance:

IFRSs (EUR million)	2015	2016	Change (%)
Haniel Group
Revenue*	3,695	3,620	-2%
Operating profit	193	229	+19%
Profit after taxes	120	144	+20%
Net financial position Equity ratio (in per cent)	445 61%	575 60%	+29% -1% point
Annual average number of employees (headcount)	12,930	13,882	+7%
BekaertDeslee**
Revenue	139	310	>+100%
Operating profit	16	28	+75%
Annual average number of employees (headcount)	1,466	2,340	+60%
CWS-boco
Revenue	779	800	+3%
Operating profit	75	77	+3%
Annual average number of employees (headcount)	7,563	7,661	+1%
ELG
Revenue*	1,714	1,386	-19%
Operating profit	-6	18	>+100%
Annual average number of employees (headcount)	1,282	1,181	-8%
TAKKT
Revenue	1,064	1,125	+6%
Operating profit	129	142	+10%
Annual average number of employees (headcount)	2,403	2,489	+4%
METRO GROUP
Haniel investment result	57	46	-19%

 

* Prior-year figures have been adjusted in accordance with IFRS; see the explanations on page 98 of the notes to the consolidated financial statements.
** The 2015 figures refer to the period from June 2015 through December 2015. The 2016 figures also include DesleeClama from March 2016 onwards.

You will also find this information in the 2016 Annual Report and the 2016 Online Annual Report at Online Annual Report.

Notes to editors:

– The interactive 2016 Online Annual Report, which has been optimised for mobile devices, includes details on the Haniel Holding Company’s digital initiative and its implementation by the divisions, as well as information on creditor relations.

– The press conference for media representatives will be broadcast (in German and English) by live webcast starting at 10:00 a.m. (CET)

– Further press information, including a digital press kit here www.haniel.de/presskit.

– Haniel on Facebook, Twitter and LinkedIn

– You will find images and moving images for Haniel and the divisions here www.haniel.de/en/press/media-database/

Haniel
Franz Haniel & Cie. GmbH is a German family-equity company which has been headquartered in Duisburg-Ruhrort since it was founded in 1756. It is from there that the Holding Company, which is wholly owned by the family, manages a diversified portfolio in line with a long-term investment strategy as a value developer. Haniel’s portfolio currently includes four business divisions which are independently responsible for their own operating business and which hold a leading market position in their respective sectors: BekaertDeslee, CWS-boco and ELG (wholly owned), as well as TAKKT (majority owned) along with the METRO GROUP financial investment.

You can find more information about Haniel at www.haniel.com and www.enkelfaehig.de.

Contact
Dietmar Bochert, Corporate Communications, +49 203 806-578,
Fax: +49 203 806-80578, E-mail: dbochert@haniel.de

You can also find this press release at www.haniel.com.

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Contact:
Dietmar Bochert
Director Corporate Communications

Tel.: +49 203 806-578
E-Mail: DBochert@haniel.de