Half-Year Financial Report
2016
6
The Haniel Group
8
Haniel Group interim management report
35
Consolidated interim financial statements
54
Responsibility statement
56
56
58
Additional information
Contact
Publication details
Haniel Key Figures
SUMMARY OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
EUR million
Revenue
Operating profit
Profit before taxes
1st half-year 2015
1st half-year 2016
Change
1,982
1,800
-9%
109
115
+6%
13
57
>+100%
Profit after taxes
-21
25
>+100%
Haniel cash flow
204
233
+14%
Buy & build strategy
successful
Encouraging growth in all Haniel Group
earnings figures
Bekaert Textiles integrates DesleeClama
Sales initiative stimulates growth
at CWS-boco
Revenue weighed down by cyclical
ELG business
Strong revenue and earnings growth
at TAKKT
Investment result lifted by Metro
Haniel establishes Schacht One
digital unit and invests in digital-­focussed
venture capital funds
6
Haniel half-year financial report 2016 / The Haniel Group
Franz Haniel & Cie. GmbH
The Franz Haniel & Cie. Holding Company is a tradition-steeped German
family-equity company. It maintains a
diversified portfolio and pursues a longterm investment strategy as a value
developer. Its objective is to continually
increase the value of the Company
while also strengthening its social and
environmental values. The Company
has always been headquartered in Duisburg-Ruhrort, where it has been shaping
the future since 1756.
www.haniel.de/en
BekaertDeslee
BekaertDeslee is the leading specialist
for the development and manufacturing
of woven and knitted mattress textiles.
www.bekaertdeslee.com
EQUITY INTEREST 100%
EUR million
Revenue
Operating profit
Employees
(average headcount)
30 Jun. 2015* 30 Jun. 2016
20
146
2
10
1,498
2,337
CWS-boco
CWS-boco ranks among the leading
international full-service providers
of washroom hygiene products, dust
control mats, workwear and textile
services.
www.cws-boco.com
EQUITY INTEREST 100%
EUR million
Revenue
Operating profit
Employees
(average headcount)
* Bekaert Textiles was acquired by Franz Haniel & Cie. GmbH in the first half of 2015.
These figures therefore relate exclusively to June 2015.
30 Jun. 2015 30 Jun. 2016
382
393
36
37
7,574
7,608
7
Haniel half-year financial report 2016 / The Haniel Group
ELG
ELG is a global leader in the trading,
processing and recycling of raw materials for the stainless steel industry
as well as high performance materials
such as superalloys, titanium and carbon fibres.
www.elg.de
EQUITY INTEREST 100%
EUR million
30 Jun. 2015 30 Jun. 2016
Revenue
Operating profit
Employees
(average headcount)
1,074
707
11
2
1,301
1,188
TAKKT
TAKKT bundles a portfolio of B2B direct
marketing specialists for business
equipment in Europe and North America in a single company.
www.takkt.com
EQUITY INTEREST 50.25%
EUR million
30 Jun. 2015 30 Jun. 2016
Revenue
Operating profit
Employees
(average headcount)
506
554
65
81
2,348
2,485
METRO GROUP
METRO GROUP is among the premier
international merchandisers.
www.metrogroup.de
EQUITY INTEREST 25.00%
EUR million
Haniel investment
result
30 Jun. 2015 30 Jun. 2016
-60
-30
8
Haniel Group Interim
Management Report
10
Group structure and business models
12
12
Report on business situation
Haniel Group
12 Revenue and earnings performance
14 Financial position
17 Assets and liabilities
18 Employees
19
22
24
26
28
30
Holding Company Franz Haniel & Cie. BekaertDeslee
CWS-boco
ELG
TAKKT
METRO GROUP
32
Report on expected developments
10
Haniel half-year financial report 2016 / Haniel Group interim management report / Group structure and business models
Group structure and
business models
The Haniel Group combines four divisions and one financial investment. Franz Haniel &
Cie. GmbH functions as a strategic management holding company and is responsible for
portfolio management. The operating business is in the hands of the five investments,
which act independently of one another and which each occupy a leading market position.
Holding Company designs the portfolio
Franz Haniel & Cie. GmbH is a tradition-steeped German
family-equity company whose objective is to sustainably
increase the value of its investment portfolio over the
long term. Since the family shareholders have provided
equity for an unlimited term, Haniel can pursue a longterm investment strategy. This strategy is aimed towards generating returns which permanently exceed the
cost of capital. Haniel strives to achieve this economic
goal in harmony with ecological and social goals. The
Company is pursuing this goal by following the guiding
principle of the “honourable businessman”. In addition, capital and management are separated at Haniel:
Although the Company is 100 per cent family owned, no
member of the Haniel family works at the Company.
Haniel is family equity.
Family equity combines the best of both worlds,
uniting the professionalism of private equity with
the values of a family-owned business.
When structuring the portfolio, Haniel concentrates on
business models that are supported by global mega­
trends and therefore have a high potential for increases in
value over the long term. Promising markets and business
models are analysed continually in order to detect growth
opportunities. In February 2016, the Bekaert Textiles
division – which has been part of the Haniel Group since
June 2015 – acquired the DesleeClama Group, significantly
expanding its global market position. As a consequence,
the company has since traded as BekaertDeslee. The
Holding Company actively supports the corresponding
integration measures. This once again demonstrates
Haniel’s buy & build approach: to acquire new divisions
and promote their growth, both organically and through
their own acquisitions.
Haniel as strategic catalyst
In addition to portfolio management, the Holding Company is also responsible for setting strategic guidelines
for the operating divisions – in this respect the Holding
Company considers itself as a strategic catalyst. Strategic initiatives are agreed on in discussion with the
Haniel portfolio
Divisions
Financial investment
BekaertDeslee
CWS-boco
ELG
TAKKT
METRO GROUP
Equity interest
100%
Equity interest
100%
Equity interest
100%
Equity interest
50.25%
Equity interest
25.00%
BekaertDeslee is the leading
specialist for the development and manufacturing of
woven and knitted mattress
textiles.
CWS-boco ranks among
the leading international
full-service providers
of washroom hygiene
products, dust control
mats, workwear and textile
services.
ELG is a global leader in the
trading, processing and recycling of raw materials for
the stainless steel industry
as well as high performance materials such as
superalloys, titanium and
carbon fibres.
TAKKT bundles a portfolio
of B2B direct marketing
specialists for business
equipment in Europe and
North America in a single
company.
METRO GROUP is among
the premier international
merchandisers.
11
Haniel half-year financial report 2016 / Haniel Group interim management report / Group structure and business models
divisions; these are implemented by the divisions under
their own responsibility. The divisional management
teams report regularly to Haniel’s Management Board
on their progress. The Holding Company is also responsible for selecting and developing top executives for
the divisions, providing the divisions with proven tools
and offering selected services. The high relevance of
digitalisation and the opportunities that it presents have
motivated Haniel to provide a team of experts to support all divisions in their implementation of appropriate
digitalisation projects. Since April 2016, these activities
have been bundled in Schacht One GmbH which, with its
headquarters in the Zollverein Coal Mine Industrial Complex with a rich tradition in Essen, builds on the dynamic
for change and innovative spirit in Haniel’s history.
Haniel’s specific role as an active investment holding
company ensures that all divisions use their respective
business models to contribute to the value enhancement of the investment portfolio in the best manner
possible.
No risks jeopardising the going concern assumption
At present, no risks which may jeopardise the Group as
a going concern have been identified, nor have notable
risks exceeding those normally encountered in business. The risks and opportunities of future development
discussed in detail starting on page 65 of the 2015
annual report remain relevant to the Haniel Group. For
a discussion of expected developments in the current
financial year, please refer to the report on expected
developments starting on page 32 of this Half-year
Financial Report.
12
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Revenue and earnings performance
Haniel Group
Revenue and earnings performance
Group revenue declined in the first six
months of the financial year due to the
continuing weak performance of the
commodity markets in the ELG division, which had been expected. All other
divisions saw growth in their contributions to revenue in the first half of 2016.
In addition, the Haniel Group was able
to generate encouraging growth in all
earnings figures.
Essentially stable market environment
In the first months of 2016, the economic environment
proved essentially stable in the markets relevant for the
Haniel Group. There was slight growth in the developed
economies, where the divisions are primarily active. In
this regard, economic growth and the resultant stimuli
for business development remained stronger in the
US than in Europe. Europe continued to record stable
growth following the moderate but constant recovery in
the prior year. In Europe, the Haniel Group benefited in
particular from the continuing steady growth in Germany. Global economic growth was also characterised
by reduced momentum in the emerging markets and developing countries, particularly China. The uncertainties
in the market environment were fuelled by the “Brexit”
referendum in the United Kingdom on 23 June, which resulted in a vote to leave the European Union in the foreseeable future. A number of political developments and
conflicts in the Arab world and in Africa also contributed
to a worsening of the economic environment.
In addition to the macroeconomic environment, the
conditions in the stainless steel market segment are of
great significance to the Haniel Group. These conditions
were substantially worse in the first half of 2016 than in
the previous year. A major cause of this was the sustained economic cooling in China. Dampened economic
expectations and the worldwide oversupply of primary
nickel resulted in a persistent price decline for nickel,
the most significant price driver in stainless steel. On
average, prices were down 37 per cent year on year.
However, there was also a year-on-year decrease in the
commodity prices relevant for the ELG division, e.g. iron,
chrome and titanium.
REVENUE
EUR million
OPERATING PROFIT
EUR million
-9%
+6%
1,982
1,800
109
115
30 Jun. 2015
30 Jun. 2016
30 Jun. 2015
30 Jun. 2016
Although the positive economic trend in the US and Germany had a positive effect on the Haniel Group’s revenue
and earnings performance, the negative conditions in
the stainless steel and superalloy market segments and
the reduced momentum in the emerging markets and
developing countries had offsetting effects.
Revenue boosted by acquisitions
During the first half of 2016, the Haniel Group recorded
a 9 per cent decline in revenue, to EUR 1,800 million.
This is attributable solely to ELG. The significantly lower
prices for all relevant commodities – in particular the
considerable drop in nickel prices – and the reduced output tonnage due to the difficult market environment affected this development. Revenue was primarily boosted
by the positive contribution made by the BekaertDeslee
division, which covered an entire half-year period for the
first time. The newly acquired division had only been
included in the figures for one month during the same
period of the previous year. Bekaert Textiles’ acquisition
of the DesleeClama Group in February 2016 also made
a positive contribution to revenue growth in the four
months that followed. TAKKT’s acquisitions of Post-Up
Stand and BiGDUG also contributed to additional
revenue, as did other smaller acquisitions by CWS-boco
in the previous year. Organic growth in the TAKKT and
CWS-boco divisions was also encouraging. Currency
translation effects only had a minor impact. Adjusted for
business combinations and disposals as well as currency
13
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Revenue and earnings performance
translation effects, the Haniel Group’s revenue was
down year on year by 16 per cent.
Buy & build strategy a success:
BekaertDeslee division makes a positive
contribution to revenue and earnings growth.
Operating profit improved
In the first half of 2016, the Haniel Group’s profit was
boosted by the fact that the new BekaertDeslee division
was included for the first time over six months. However,
growth at TAKKT also made a significant contribution.
CWS-boco also generated slightly higher operating profit.
The reduction in output tonnage and the significant
drop in the price of nickel meant a considerably weaker
operating profit for ELG than in the first half of 2015.
In the aggregate, however, ELG’s deficit was more than
offset; as a consequence, operating profit amounted to
an encouraging EUR 115 million in the first half of 2016, up
on the prior-year figure of EUR 109 million.
Profit before taxes significantly higher
Profit before taxes increased significantly from EUR
13 million to EUR 57 million. In addition to the improved
operating profit, this is attributable in particular to a
higher investment result and an improved result from
financing activities.
PROFIT BEFORE TAXES
EUR million
PROFIT AFTER TAXES
EUR million
>+100%
>+100%
13
57
-21
25
30 Jun. 2015
30 Jun. 2016
30 Jun. 2015
30 Jun. 2016
The investment result improved from EUR -60 million
in the same period of the previous year to EUR -31 million in the first half of 2016. This was caused by the
METRO GROUP, which firstly reported a year-on-year
increase in operating profit due to lower one-off factors,
and secondly generated improved net financial income.
By contrast, the METRO GROUP’s less favourable tax
result as against the first half of 2015 had an adverse
effect. With a view to the negative investment result, 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.
The result from financing activities, comprising the
finance costs and other net financial income, amounted
to EUR -27 million in the reporting period. In the same
period of the previous year, this figure had amounted to
EUR -36 million. A significant reason for this improvement was the year-on-year decrease in finance costs due
to the lower level of indebtedness. Haniel thus continued to benefit from the systematic debt reduction.
Significant rise in profit after taxes
With a slight drop in the tax expense, the growth in
profit before taxes had a significant impact on profit
after taxes. This rebounded from EUR -21 million in the
prior-year period to EUR 25 million in the first half of
2016, an improvement of EUR 46 million.
14
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Financial position
Haniel Group
Financial position
Haniel’s financial strategy is bearing
fruit: after European rating agency
Scope had already classified Haniel as
investment grade, Standard & Poor’s
followed suit and raised its rating. Both
ratings take account of Haniel’s sustained conservative financial policy:
the Holding Company remains de facto
debt-free and is thus well equipped
for further investments to expand its
portfolio.
Financial governance between the Holding Company
and the divisions
The ultimate objective of financial management is to
cover the financing and liquidity needs at all times
while maintaining entrepreneurial independence and
limiting financial risks. The Holding Company prescribes
principles to the divisions in order to establish minimum
organisational requirements and to govern the structure
of key financial management processes, including financial risk management. These directives are documented
in guidelines for the treasury departments of the Holding Company and the divisions. The Holding Company
and the divisions use this basis to identify, analyse and
evaluate the financial risks that each operating business
is responsible for – in particular liquidity, credit, interest
rate and currency risks – and take measures to avoid or
limit these risks. In addition, the Holding Company sets
the financing and financial risk management strategy
and approves the financial counterparties and financial
instruments used, as well as limits and reports.
While staying within these guidelines, the divisions manage their own financing based on their own financial and
liquidity planning. Cash management is also the responsibility of the divisions. In order to leverage economies of
scale, the Holding Company and its finance companies
support the divisions and, together with partner banks,
offer cash pools in various countries. Combining central
directives with the autonomy of the divisions in terms
of their financing takes into account both the different
levels of investment by the Holding Company in the
divisions as well as the divisions’ individual requirements
for financial management.
Trusting cooperation with financing partners
As a family business with stable but limited equity
financing, access to sources of debt capital are of high
importance to Haniel. Accordingly, a good reputation with financial partners is essential. A significant
aspect of this is providing rating agencies and business
partners with timely and transparent information and
the equal treatment of banks and investors. Only if
this is ensured can a company earn a high degree of
trust from banks and investors as a long-standing and
reliable business partner, such as Haniel has enjoyed for
many years.
Scope and S&P affirm investment grade rating
Haniel submits itself to external rating assessments
voluntarily, thus ensuring broad access to capital markets. European rating agency Scope assessed Haniel’s
creditworthiness for the first time in February 2016.
The future-oriented approach used for the analysis
convinced Haniel to provide the Scope rating to its investors as a further opinion. Haniel received a long-term
issuer rating of BBB- with a stable outlook, with Scope
therefore classifying it as investment grade. In April
2016, Standard & Poor’s (S&P) raised its Long and Short
Term Corporate Credit Rating from BB+/B (positive
outlook) to BBB-/A-3 (stable outlook). This improved
rating also corresponds to an investment grade rating.
Both ratings are a result of Haniel’s sustained conservative financial policy. This is distinguished by a moderate
target net financial debt level of EUR 1 billion at the
level of the Holding Company coupled with a solid longterm financing structure. The improvement in the rating
also marked a positive assessment of Haniel’s cautious
financial investment policy and its prudent approach to
investments.
The ratings improvements were also supported by the
sound development of the total cash cover and market
value gearing, key figures which are crucial to the rating.
Total cash cover is calculated as the ratio of proceeds
from dividends and profit transfers to payments for current costs incurred by the Holding Company, as well as
interest and dividends to the Haniel family. Market value
gearing corresponds to the ratio of net debt to the value
of the Haniel investment portfolio. It amounted to 17 per
cent as at the 30 June 2016 reporting date and was thus
within very comfortable territory.
15
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Financial position
Broad-based financing
The Haniel Group’s financial management relies on diversification of financing: various financing instruments
with a broad range of business partners ensure access
to liquidity at all times and reduce the dependency on
individual financial instruments and business partners.
Overall, the Haniel Group had used and unused credit
facilities on the scale of EUR 2 billion at the end of the
first half of 2016. This exemplifies the active pursuit of
security and independence.
A balanced maturity profile with an appropriate, longterm orientation guarantees additional financial stability.
A further key pillar of financial management is the ability
to obtain funding on the capital market. To that end,
the Holding Company updates its commercial paper
programme at longer intervals and its debt issuance
programme (still in the amount of EUR 2 billion) annually.
Based on information contained therein, bonds can be
placed very flexibly in terms of the timing and amount
and adjusted to the respective market conditions.
Overall, the financial liabilities reported in the Haniel
Group’s Statement of Financial Position were EUR 1,637
million as at 30 June 2016. Of that amount, EUR 597
million has a maturity of more than one year. Of the EUR
1,040 million in liabilities reported as current liabilities,
EUR 473 million were attributable to the exchangeable
bond linked to ordinary shares in METRO AG. Although
HANIEL CASH FLOW
EUR million
CAPITAL EXPENDITURE
EUR million
+14%
-64%
204
754
30 Jun. 2015
233
30 Jun. 2016
30 Jun. 2015
275
30 Jun. 2016
this only reaches maturity in 2020, it is reported as a
current liability due to the right of the bondholders to
exchange the bond for shares, which can be exercised at
any time.
The value of outstanding bonds as at 30 June 2016
remained level with the figure of EUR 0.9 billion recorded
at the end of 2015. In addition, the CWS-boco, ELG
and TAKKT divisions have also financed themselves on
the market for promissory notes in recent years, thus
broadening their financing base. As at 30 June 2016, the
value of promissory note loans, commercial paper and
other securitised liabilities in the Haniel Group remained
unchanged as against 31 December 2015, at EUR 0.2 billion. In addition, the BekaertDeslee, CWS-boco and ELG
divisions maintain programmes for the continual sale of
trade receivables to third parties.
Solid financial buffer despite increased net debt
The net financial liabilities of the Haniel Group, i.e., financial liabilities less cash and cash equivalents, increased
slightly to EUR 1,393 million as at 30 June 2016 compared to EUR 1,338 million at the end of 2015. The Haniel
Group’s net financial position also rose, increasing to
EUR 546 million in the first half of 2016 versus EUR 445
million as at 31 December 2015. The net financial position
equals the net financial liabilities less the investment
position of the Holding Company – excluding current and
non-current receivables from affiliated companies. The
rise in both net financial debt and the net financial position is due in particular to the use of financial resources
for the DesleeClama Group acquisition.
At the level of the Holding Company, net financial liabilities also increased, rising from EUR 849 million as of
31 December 2015 to EUR 960 million as of 30 June 2016.
This is also due to the fact that the Holding Company
provided the divisions with financial resources, thus
reducing its own cash and cash equivalents. Thanks to
the financial support provided by the Holding Company,
the Bekaert Textiles division acquired last year was able
to complete the above-mentioned DesleeClama Group
acquisition and further accelerate its growth.
The net debt is offset by a portfolio of financial assets
that will be used in the coming years to acquire additional divisions as well as to redeem outstanding bonds.
16
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Financial position
Including current and non-current receivables from
affiliated companies, the Holding Company had financial
assets valued at EUR 1,226 million as at 30 June 2016.
Since financial assets continue to exceed net financial
debt, the Holding Company remains de facto debt-free
and has a solid financial buffer.
Haniel cash flow increases further
The Haniel Group uses the performance indicator Haniel
cash flow to assess the strength of its liquidity position
in its current business activities. Haniel cash flow is
first and foremost available for the purpose of financing
current net assets* and investments. In the first half of
2016, Haniel cash flow increased from EUR 204 million
in the prior-year period to EUR 233 million. This was
primarily due to the encouraging performance in the
operating business in almost all divisions.
Cash flow from operating activities, which supplement
Haniel cash flow in depicting the change in current net
assets, amounted to EUR 164 million in the first half of
2016, and were thus lower than Haniel cash flow. This is
mainly attributable to the increase in trade receivables
due to lower sales of receivables at CWS-boco and higher
tax receivables. In the same period of the previous year,
cash flow from operating activities amounted to EUR 243
million, which was higher than the Haniel cash flow. This
is attributable to the fact that financial resources were
freed up as a result of the decrease in current net assets.
In turn, this was due primarily to a lower price for nickel
and reduced output tonnages at ELG, which resulted in
declining inventories and reduced trade receivables.
EUR million
sition as the largest single investment. This figure also
includes acquisitions of financial investments by the
Holding Company in addition to the divisions’ investments in intangible assets and in property, plant and
equipment. The payments compare to proceeds from
divestment activities amounting to EUR 152 million.
These were primarily attributable to the sale of financial
investments by the Holding Company. During the same
period of the previous year, cash flow from investing activities had amounted to EUR -218 million. This included
higher payments with the figure of EUR 754 million – in
comparison with the first half of 2016 – primarily for the
Holding Company’s acquisition activities and those of
the divisions, their investments in intangible assets and
in property, plant and equipment, and the Holding Company’s financial investments. In the prior-year period, the
payments compared to likewise higher proceeds from
divestment activities amounting to EUR 536 million. In
the first half of 2015, that figure primarily consisted of a
cash inflow from the disposal of Metro shares.
Cash flow from financing activities amounted to
EUR -137 million, as against EUR 253 million in the first
half of 2015. A dividend in the amount of EUR 50 million
was paid out to the shareholders of Franz Haniel & Cie.
GmbH in 2016, and debt was repaid, primarily at TAKKT
and ELG. In the prior-year period, cash inflows from
financing activities exceeded the corresponding cash
outflows due to the fact that Haniel had generated a
high cash inflow from the issue of the exchangeable
bond linked to Metro shares.
30. Jun. 2015 30. Jun. 2016
Haniel cash flow
204
233
Cash flow from operating activities
243
164
Cash flow from investing activities
-218
-123
Cash flow from financing activities
253
-137
DesleeClama Group acquisition as largest single
investment
Cash flow from investing activities, i.e. the net outlays
for capital expenditure and proceeds from divesting
activities, amounted to EUR -123 million in the first half
of 2016. Payments for investments amounted to EUR 275
million, which includes the DesleeClama Group acqui-
* Net current assets consist essentially of trade receivables and inventories less trade payables.
17
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Assets and liabilities
Haniel Group
Assets and liabilities
Even after the DesleeClama Group acquisition, the Haniel Group continues to
boast a very solid balance sheet. The equity ratio remains high, underscoring the
investment potential at Haniel’s disposal.
Lower total assets
The Haniel Group’s total assets declined from EUR 6,847
million as at 31 December 2015 to EUR 6,726 million as
at 30 June 2016. This was reflected above all in non-current assets, which declined from EUR 5,237 million as
at 31 December 2015 to EUR 5,129 million. The primary
cause was the lower carrying amount of the Metro
investment due to the dividend payment. The acquisition
of the DesleeClama Group caused a rise in intangible assets and property, plant and equipment, which increased
non-current assets. A portion of the Holding Company’s
cash and cash equivalents was used to finance the
DesleeClama Group acquisition; by contrast, the firsttime inclusion of the company increased current assets,
which remained stable year on year.
ratio remained almost constant at 60 per cent. This
sustained high level underscores Haniel’s investment
potential. Non-current liabilities declined to EUR 1,198
million, primarily due to the reclassification of the Holding Company’s bonds that mature in 2017. By contrast,
current liabilities increased from EUR 1,105 million as at
31 December 2015 to EUR 1,493 million, primarily due to
the reclassification of these bonds.
Recognised investments down on high prior-year figure
The Haniel Group’s recognised investments declined
from EUR 616 million in the same period of the previous
year to EUR 283 million in the first half of 2016. This
decrease was caused by the high level of recognised
investments in the previous year, which was primarily due to the acquisition of the new Bekaert Textiles
division. This was partly offset in the first half of 2016 by
lower acquisition volumes due to the DesleeClama Group
acquisition.
High equity ratio underscores investment potential
Equity declined slightly from EUR 4,169 million as at
31 December 2015 to EUR 4,035 million as at 30 June
2016. This was caused by negative measurement effects
for pensions and currency translation. Despite the
decrease, the lower total assets meant that the equity
Consolidated statement of financial position
ASSET STRUCTURE
EUR million
EQUITY AND LIABILITY STRUCTURE
EUR million
6,847
6,847
6,726
24%
24%Current assets
76%
76%Non-current assets
16%
6,726
22%Current liabilities
23%
18%Non-current liabilities
61%
31 Dec. 2015
30 Jun. 2016
31 Dec. 2015
60%Equity
30 Jun. 2016
18
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Employees
Haniel Group
Employees
The number of employees in the Haniel
Group increased in the first half of 2016,
primarily as a result of the Group’s acquisition activity. The Haniel Group’s average headcount amounted to 13,829 in the
first half of 2016.
The average number of employees at TAKKT increased
slightly from 2,403 in the previous year to 2,485; this
was due to the positive business development and the
expansion of the digital activities. It was only offset to a
limited extent by the decision to withdraw from China in
the first half of 2016.
The number of employees in the Haniel Group increased
by 7 per cent, in particular due to the acquisition of
DesleeClama by the Bekaert Textiles division. As a
result, the number of employees in the Haniel Group
averaged 13,829 in the first half of 2016, compared with
12,930 at the end of 2015.
Digitalisation is also affecting human
resource requirements: key positions such as
Chief Digital Officer or Senior Digital Advisor
were created and newly filled.
The global headcount in the BekaertDeslee division,
which has been operating under this name since March
2016, averaged 2,337 in the first half of 2016.
The average number of employees at CWS-boco was 7,608
in the first half of 2016, versus an average of 7,563 employees in the previous year. The slight increase was primarily
due to the strengthening of the sales function, which was
systematically pursued as part of the sales initiative.
The average headcount at ELG decreased from 1,282 in
the previous year to 1,188 in the first half of 2016. In the
stainless steel business, the division further adapted its
capacities to the tense market situation.
EMPLOYEES
Average headcount
+7%
12,930
13,829
31 Dec. 2015
30 Jun. 2016
Digitalisation will give rise to a qualitative change in human resources requirements in the foreseeable future. In
addition, the business culture – primarily the means of cooperation – will be subject to lasting change. In addition
to establishing its own digital unit, Schacht One, Haniel
has organised training and initiatives to promote dialogue
as a first step toward address this trend.
19
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Holding Company Franz Haniel & Cie.
Holding Company Franz Haniel & Cie.
The Holding Company* successfully
enhanced the portfolio in the first half
of 2016 and provided key momentum for
further development: the family equity
company supported its market-leading
Bekaert Textiles division, which was acquired in 2015, in its own acquisition and
integration of the DesleeClama Group.
The Schacht One digital unit and the investments in digital-focused venture capital funds will provide new momentum to
further develop the value of the portfolio.
Portfolio successfully enhanced
The Holding Company supported Bekaert Textiles, a
leading specialist for the development and manufacturing
of mattress textiles that it had acquired in June 2015,
in acquiring the DesleeClama Group, financing the
acquisition and in the subsequent integration process.
This supplementary acquisition enabled the company to
consolidate its position in established markets and expand
its position in new regions. The division has been operating
under the name BekaertDeslee since March 2016.
Following the successful portfolio measures initiated in
the first half of 2016, more than EUR 1.0 billion is intended
to be invested to acquire further new divisions. As a family-­
equity company, Haniel pursues a long-term investment
approach. Its focus lies on well-positioned medium-sized
companies which operate in attractive niches which can
expand their market-leading position with the help of
Haniel, contributing to the diversification of the portfolio.
In addition, Haniel gives preference to the acquisition of
controlling interests in non-listed companies, which can
also take place in stages. In line with Haniel’s objective of
being “enkelfähig”, the only candidates for acquisition are
companies which already make a positive contribution to
the environment and society through their sustainable
actions, or which will be able to do so in the future.
The intention is to invest more than EUR 1.0 billion
in acquiring further new divisions.
Haniel will continue to find the right companies by
patiently and prudently weighing the options as they
arise – the Bekaert Textiles acquisition and its expansion
to include the DesleeClama Group illustrates this
approach.
Strategic momentum for investments and
future value growth
In the first half of the year, the Holding Company
launched several forward-looking initiatives aimed
at developing the future value of the portfolio. These
are aligned with Haniel’s objective of acting as a value
developer for the investments and keeping both value
and values in view.
The Holding Company established Schacht One,
Haniel’s own digital unit in the historic Zollverein Coal
Mine Industrial Complex in Essen, to help implement
the Digital Agenda at the investments. Schacht One
will work together with the divisions to develop and
directly assess the plausibility of innovative and radical
user-oriented ideas and problem-solving approaches.
If an approach meets with widespread user interest, an
initial minimal viable product (MVP, i.e., an 80 per cent
solution) will be developed and tested on the market.
Following successful completion of the MVP phase,
the product and new business is rapidly rolled out and
integrated for scaling in the respective division.
In addition, at the beginning of the year Haniel decided
to invest up to EUR 50 million in selected venture capital
funds, thereby making indirect investments in start-ups.
Aside from pursuing entrepreneurial objectives, the aim
is to create learning opportunities relating to new digital
business models. For example, Haniel has invested in
five different funds in recent months, which in turn
invest in a number of new companies. This expertise
can for example give rise to innovation processes at the
divisions; it also provides momentum as Haniel continues to seek out new investments that will be successful
in the long term.
Responsibility for the region and society
Together with the KfW Foundation, the Prof. Otto
Beisheim Foundation and Social Impact gGmbH, Haniel
established Social Impact Lab Duisburg. The incubator
for social entrepreneurs supports business founders
* Incl. the Holding Company’s financing and service companies. You can find the financial statements of the Franz Haniel & Cie. subgroup
under “Creditor Relations” at www.haniel.de/en
20
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Holding Company Franz Haniel & Cie.
who want to use their ideas to solve pressing social
challenges; it connects them with other stakeholders
and establishes them in the region. The aim of spreading
social innovations and establishing social enterprises is
to create positive momentum for the ongoing structural
transformation in the Rhine-Ruhr region. Haniel is
making the Social Impact Lab premises available at its
corporate location. In addition, a specialist offering such
as a mentoring programme and specialist workshops
with experts from Haniel promote an exchange of ideas
between the start-up teams and Haniel employees. The
Holding Company’s employees benefit from the dialogue
with the start-up teams, become familiar with their
specific business culture and in doing so gain valuable
motivation for their work at the Holding Company.
Haniel does not just provide opportunities for founders
of social enterprises, but also for refugees: as a founding
member of “We together – The integration initiative of
the German economy” (“Wir zusammen – Integrationsinitiativen der deutschen Wirtschaft”), Haniel was one of
the first 35 companies to sign up to this initiative for the
integration of refugees. The network has since grown to
96 companies. At its headquarters in Duisburg, Haniel
coordinates directly with the city authorities to provide
assistance when there are acute shortages in support,
and assists the city in developing the organisation and
warehousing logistics needed to support integration.
There are also future plans to offer professional integration within the Haniel Group for refugees granted rights
of residence, as well as cultural, general knowledge and
language training, and care for children and young people. In cooperation with the project partners – the Haniel
Foundation, the start-up teams at the Social Impact Lab
and the University of Duisburg-Essen – Haniel supports
numerous social entrepreneurship activities in the field
of integration.
Value of the portfolio increased
The value of the investment portfolio amounted to EUR
4,985 million as at 30 June 2016. It was therefore higher
than the EUR 4,887 million reported at the end of 2015.
The value of the investment portfolio is calculated as the
sum of the valuations of the divisions, the METRO GROUP
financial investment, financial assets and other assets,
less net financial liabilities at the Holding Company level.
Listed divisions and the financial investment are valued
on the basis of three-month average share prices, while
the remainder of the divisions are valued on the basis of
market multipliers, and for the financial assets on the
basis of fair values as at the reporting date.
The value of Haniel’s investment portfolio
increased slightly as against the prior year to
EUR 4,985 million as at 30 June 2016.
Haniel welcomes the strategic decision of Metro’s management to raise internal value potential and supports
the plans for a demerger at the METRO GROUP. This
opens up the possibility of new growth and development
opportunities for the financial investment.
Financial assets higher than net financial liabilities
The sale of Celesio, the reduction of the shares in the
Metro investment and the placement of the exchangeable
bond linked to Metro shares in recent years put the
Holding Company in a distinctly comfortable financial
situation. Therefore, Haniel invests predominantly in financial assets. As at 30 June 2016, taking into account current
and non-current receivables from affiliated companies,
there were financial assets valued at EUR 1,226 million
versus net financial liabilities amounting to EUR 960
million. The exchangeable bond linked to Metro shares,
which was issued in the previous year, is a key component
of Haniel’s financing. Haniel has therefore secured the
outstanding financing terms in the current capital market
environment until 2020. In addition to financing through
the capital markets, this will be supplemented by existing,
currently unused credit facilities at banks. However, the
major part of financing is and remains the equity made
permanently available by the Haniel family.
The Holding Company thus retains a solid liquidity
buffer, both for the expansion of the portfolio and for
the redemption of bonds in the amount of EUR 257
million falling due in February 2017. Over the medium to
long term, Haniel’s goal remains to have some EUR 1 billion in net debt after acquiring new divisions.
Investment grade rating received from Scope and S&P
Haniel submits itself to external rating assessments
voluntarily, thus ensuring broad access to capital
21
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation / Haniel Group /
Holding Company Franz Haniel & Cie.
markets. European rating agency Scope assessed
Haniel’s creditworthiness for the first time in February
2016. The future-oriented approach used for the analysis
convinced Haniel to offer the Scope rating to its investors as a further opinion. Haniel received a long-term
issuer rating of BBB- with a stable outlook, with Scope
therefore classifying it as investment grade. The rating
is a consequence of Haniel’s conservative investment
strategy as a family equity company with comparatively
low market value gearing (the ratio of net financial debt
to the market value of the portfolio), which amounted
to 17 per cent as at the 30 June 2016 reporting date and
was thus within very comfortable territory. In addition,
the Scope rating acknowledged Haniel’s strong liquidity
position and solid cash flow profile.
In April 2016, Standard & Poor’s Services (S&P) raised
its Long and Short Term Corporate Credit Rating from
BB+/B (positive outlook) to BBB-/A-3 (stable outlook).
As a result, S&P again classified Haniel as investment
grade. The improvement is a result of Haniel’s ongoing
conservative financial policy. This is distinguished by a
moderate target net financial debt level of EUR 1 billion
coupled with a solid long-term financing structure. The
improvement in the rating also marked a positive assessment of Haniel’s cautious financial investment policy
and its prudent approach to investments. Moody’s had
already raised the rating to Ba1 with a stable outlook in
the second half of 2013. This was also supported by the
sound development of the total cash cover and market
value gearing, key figures which are crucial to the rating.
Total cash cover is calculated as the ratio of proceeds
from dividends and profit transfers to payments for
current costs incurred by the Holding Company, as well
as interest and dividends to the Haniel family.
Earnings contribution of the Holding Company down
on prior year
The amount contributed by the Holding Company to
the Group’s operating profit was down year on year in
the first half of 2016. In the previous year, operating
profit was boosted by higher gains from the reversal of
provisions that were no longer needed.
22
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment BekaertDeslee
BekaertDeslee
Bekaert Textiles has been a part of
Haniel’s portfolio of divisions since June
2015. In February 2016, the leading specialist for the development and manufacturing of woven and knitted mattress
textiles acquired the DesleeClama Group,
thus driving forward the long-term
expansion of its global market position.
The company now operates under the
name BekaertDeslee. For the first time
since its acquisition, the division has
contributed revenue and profit to the
Haniel Group over a complete half year.
international markets such as Indonesia and Brazil,
where Bekaert Textiles had not been directly represented in the past. The combined company’s broad market coverage and high degree of customer proximity give
it a strong competitive position under the new name
BekaertDeslee. They will make it possible for the company to further increase its responsiveness and delivery
reliability for all customer groups once the integration
has been completed.
BekaertDeslee strengthened through acquisition
BekaertDeslee is a growth-oriented company that seeks
the long-term expansion of its global market position
through both organic growth and acquisitions. The division significantly strengthened its leading position on
the market in the first half of 2016, primarily through the
acquisition of the DesleeClama Group.
The two companies also complement each other in
other ways: DesleeClama’s great capacity for innovation meets the excellent design know-how of Bekaert
Textiles. In addition, integration enables the division to
achieve synergies – particularly in the areas of procurement, production and administration.
The DesleeClama Group, which is domiciled in Belgium
like Bekaert Textiles, was formed in 1928 and has established a position in the development and manufacture
of woven and knitted mattress textiles. In addition to
certain European markets, the company has long served
REVENUE
EUR million
REVENUE
by sales region
>+100%
45%Americas
20
146
15%Asia-Pacific
30 Jun. 2015*
30 Jun. 2016
40%Europe
The division significantly strengthened its leading
position on the market in the first half of 2016
through the acquisition of the DesleeClama Group.
The division has been working with the Holding Company since February to advance the integration of
Bekaert Textiles and DesleeClama. BekaertDeslee is
focusing on completely merging the organisations on
the one hand and has begun to optimise the global
structure of its locations on the other. The first key
corporate functions of the two companies have been
merged. In addition, the division has begun to relocate
DesleeClama’s production activities in the United States
to Bekaert Textiles’ existing production locations in the
United States and Mexico.
Cost initiatives successfully continued
In the first half of 2016, BekaertDeslee successfully and
systematically continued its work to implement both
the procurement initiative and the Lean Manufacturing
Initiative, both of which were launched in 2014. While the
centralisation and standardisation of yarn purchasing
enabled the division to reduce costs, the Lean Manufacturing Initiative is designed to improve production processes. The division has begun to expand both initiatives
to DesleeClama and has already identified new potential
for efficiency enhancement.
30 Jun. 2016
* This figure relates exclusively to June 2015.
23
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment BekaertDeslee
Encouraging contributions to revenue and
operating profit
In the first half of 2016, BekaertDeslee generated
EUR 146 million in revenue, compared to EUR 20 million
in the first half of 2015, during which Bekaert Textiles
had only contributed to revenue for a single month. The
newly acquired DesleeClama Group also made a noteworthy contribution in this area during the period from
March to June 2016. In particular, the growing demand
for higher-quality knitted mattress textiles had a positive
influence on revenue development. These products,
which also generate higher margins, accounted for more
than 50 per cent of overall revenue in the first half of
2016. The remaining revenue shares were attributable
primarily to woven mattress textiles, but also to a small
but rising extent to products with a greater depth of
value added such as ready-made mattress covers.
BekaertDeslee’s operating profit amounted to EUR 10
million in the first half of 2016, compared to EUR 2 million
in the same period of the previous year. It should be
noted that the operating profit was weighed down by the
scheduled amortisation arising from the purchase price
allocation amounting to EUR 5 million. Adjusted for this,
the operating profit was EUR 15 million.
Customer focus sharpened as part of the Digital Agenda
In the first half of 2016, BekaertDeslee began to develop its own Digital Agenda. Under the Digital Agenda,
OPERATING PROFIT
EUR million
EMPLOYEES
Average headcount
>+100%
+59%
2
10
1,466
2,337
30 Jun. 2015*
30 Jun. 2016
31 Dec. 2015
30 Jun. 2016
* This figure relates exclusively to June 2015.
the division systematically focuses on the needs of its
target groups – from mattress manufacturers to retailers through to end consumers. At its core, the Digital
Agenda represents the best-possible means to focus
product innovation on customers to enable the company to make its business model fit for the future and to
further develop it over the long term.
24
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment CWS-boco
CWS-boco
CWS-boco’s sales initiative continued to
positively impact the division’s revenue,
leading to an encouraging year-on-year
increase. Despite additional investments in product innovation and sales
functions, CWS-boco’s operating profit
(EUR 37 million) once again increased
slightly against the prior-year period.
Sales and customer loyalty further strengthened
CWS-boco further strengthened its sales function in
the first half of 2016 and again increased the number
of sales employees. Furthermore, the long-term Sales
Excellence programme positively impacted revenue
and sales efficiency. This was attributable primarily to
comprehensive training efforts that have helped to systematically enhance the sales function in recent years.
CWS-boco further improved its sales team’s performance by implementing other measures to systematically attract new and manage relationships with existing
customers.
In the first half of 2016, the division continued the
project to revamp its IT systems that has been launched
in the previous year. The objective of this project is to
realise high, uniform standards of customer service
and processes within the company with the help of a
REVENUE
EUR million
REVENUE
by division in %
+3%
382
30 Jun. 2015
52%Washroom hygiene/mats
48%Textile services
393
30 Jun. 2016
30 Jun. 2016
software application that is used throughout Europe.
In addition, this software application is designed to
support the cross-border integration of warehouse and
service processes.
Decision on new, divisional structure
In the first half of 2016, the division decided that in the
current financial year it would introduce a new, divisional
organisational structure. Two divisions would be established across all countries: the Washroom Care division
will provide washroom hygiene products and dust control
mats, while the Textile Care division’s service portfolio
will cover hire and COG linens, cleanroom products and
flat linen. The new structure will enable the company to
pursue a market strategy with an even greater focus on
customers, thereby allowing it to address its customers’
needs on a more individualised basis.
The long-term sales initiative positively
impacted revenue. This was attributable primarily
to comprehensive training efforts that have helped
to systematically enhance the sales organisation
in recent years.
Focus on digitalisation and new products
CWS-boco is working hard to digitalise its products and
services. The division presented the CWS Washroom
Information Service (WIS) 2.0 in the first half of the year.
WIS 2.0 is a system that connects washroom dispensers
and provides up-to-date information about the functioning, fill levels and usage frequency of the dispensers.
This allows CWS’ customers to operate their washrooms
much more efficiently and on a more use-oriented basis.
In addition, in the first half of 2016, CWS-boco further
developed its business with service offerings relating
to high-quality public washrooms that are available to
users for a fee.
Encouraging revenue growth
Revenue of CWS-boco in the first half of 2016 was EUR
393 million, 3 per cent over the figure in the prior-year
period. Adjusted for these currency translation effects
and minor acquisition effects, revenue increased by
3 per cent as compared to the prior-year period. This
very clearly illustrates the positive effects from the
25
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment CWS-boco
sales initiative and the Sales Excellence programme: the
number of new customers rose significantly on the one
hand, while support for existing customers and complaints and cancellations management were stepped up
on the other, thus enhancing customer loyalty over the
long term.
Adjusted for currency translation effects and minor
acquisitions effects, revenue from CWS-boco’s core
service business – the rental of workwear, washroom
hygiene products and dust control mats – increased
by 3 per cent. CWS-boco again successfully strengthened its relationship with existing customers. The fact
that cancellation rates remain low across all product
segments at CWS-boco underscores the high level of
customer satisfaction and customer loyalty.
CWS-boco supplements its service business by selling
consumables, such as soap, disinfectant and paper, as
well as dispensers and workwear. Adjusted for currency
translation and acquisition effects, revenue in this trade
business increased by 1 per cent year on year in the first
half of 2016.
Operating profit increased again
In the first half of 2016, CWS-boco again increased its
operating profit to EUR 37 million, representing a slight
year-on-year increase. CWS-boco made further investments in the future in the sales function, IT, product
OPERATING PROFIT
EUR million
EMPLOYEES
Average headcount
+3%
+1%
36
37
7,563
7,608
30 Jun. 2015
30 Jun. 2016
31 Dec. 2015
30 Jun. 2016
innovation and the digitalisation of the business model.
The associated costs were offset by the positive effects
of the sales initiative, and resulted in an overall encouraging contribution to earnings.
26
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment ELG
ELG
In the first half of 2016, ELG was confronted with an ongoing difficult market environment and thus experienced
a significant overall decrease in its
revenue and operating profit. This was
attributable primarily to considerably
lower commodity prices and stainless
steel scrap output tonnage. Increases in
the tonnage for superalloys toll processing had a stabilising effect.
In addition to the decline in quantity, the stainless
steel scrap business also had to cope with a substantial deterioration of commodity prices of the most
important stainless steel components. In the first
half of 2016, the price of nickel averaged USD 8,600
per tonne, before increasing briefly to just under USD
10,000 per tonne in the days leading up to the end of
first half of the year. In the first half of 2015, the average price per tonne had been USD 13,700. The price
of commodities not subject to hedging on the capital
market such as iron and chrome were also significantly
lower year on year.
Ongoing difficult market environment in the stainless
steel scrap business
Global stainless steel production in the first half of 2016
was slightly higher than in the prior-year period. However, there were significant regional differences. While
the production of stainless steel in ELG’s key markets –
the US and Europe – decreased in the first half of 2016,
production increased slightly in China. Suppliers such
as ELG, however, were not able to fully satisfy manufacturers’ global demand for stainless steel scrap. This is
because the sustained low commodity prices meant that
less scrap material was available on the procurement
market than had been in the prior-year period. Overall,
this situation had a negative impact on ELG’s stainless
steel scrap output tonnage, which fell by 15 per cent
year on year.
Robust demand in the superalloys business
In the first half of 2016, Utica Alloys, ELG’s division specialising in superalloys, benefited from robust demand in
the toll processing programme. While the deterioration
in the price of titanium – also a non-hedgeable commodity – exerted pressure on the trade business, processing agreements strengthened Utica Alloys’ business.
The toll processing business is largely not affected by
commodity prices and is thus a stabilising component
in times of falling or low trading prices. Nevertheless,
the output tonnage of superalloys at ELG decreased by
a total of 3 per cent year on year due to demand-related
declines in shipping tonnage.
REVENUE
EUR million
REVENUE
by sales region in %
-34%
52%Europe
1,074
707
16%Asia
30 Jun. 2015
30 Jun. 2016
32%Americas
30 Jun. 2016
In response to shifting demand, Utica Alloys
expanded its toll process business with superalloys
and secured new orders.
Operating profit down significantly year on year –
but trend is positive
Revenue declined by 34 per cent to EUR 707 million due
to the sharp decline in ELG’s output tonnage as compared to the first half of 2015 as well as considerably
lower prices for nickel and other commodities relevant
for ELG. The improved gross margin and a significantly
reduced cost base did not completely offset the price
and tonnage effects. Operating profit for the first six
months of 2016 (EUR 2 million) was significantly below
the previous year’s figure (EUR 11 million). However, the
operating profit for the first half of 2016 is significantly
higher than the operating profit in the second half of
2015. Furthermore, negative measurement effects from
27
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Wholly-owned investment ELG
hedging transactions – due to the jump in the price of
nickel as at 30 June 2016 – weighed down the result in
the first half of 2016.
Future-facing business segments and projects
driven forward
In reaction to the difficult market environment, the ELG
division implemented a strict and systematic cost management programme.
The Carbon Fibre business segment is currently suffering
from the tense market situation in its primary customer
segment, the oil and gas industry. Carbon Fibre continues to focus on the core issues of customer-oriented
product development and on sales, with the objective of
further developing the business.
ELG also made advances with respect to digitalisation.
The company is focussing on innovating its business model. A number of projects have already been
launched, such as the new “MyELG” app, and others are
currently in the test or pilot phase.
OPERATING PROFIT
EUR million
EMPLOYEES
Average headcount
-82%
-7%
11
2
1,282
1,188
30 Jun. 2015
30 Jun. 2016
31 Dec. 2015
30 Jun. 2016
28
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Majority investment TAKKT
TAKKT
TAKKT built on the previous year’s
positive development in the first half
of 2016, with a further increase in both
revenue and operating profit. The division benefited in particular from the
continuing positive business climate
in the US. TAKKT continued to make
progress in its further development into
an integrated multi-channel company.
Currently, the division is also working
systematically on developing its Digital
Agenda to further harness the opportunities offered by digitalisation.
TAKKT continues encouraging growth course
TAKKT’s revenue increased in the first half of 2016 by
9 per cent to EUR 554 million. Post-Up Stand and BiGDUG,
which were acquired in the previous year, also contributed
to the increase in revenue. With regard to organic revenue
growth (i.e., adjusted for these acquisitions and the
activities of the Plant Equipment Group disposed of in the
prior-year period, as well as negative currency translation
effects), both TAKKT AMERICA and TAKKT EUROPE contributed to the 8 per cent increase in revenue.
The organic revenue of TAKKT AMERICA grew by 10 per
cent. Both the Specialities Group and the Office EquipREVENUE
EUR million
REVENUE
by division
+9%
506
30 Jun. 2015
52%TAKKT EUROPE
48%TAKKT AMERICA
554
30 Jun. 2016
30 Jun. 2016
OPERATING PROFIT
EUR million
EMPLOYEES
Average headcount
+25%
+3%
65
81
2,403
2,485
30 Jun. 2015
30 Jun. 2016
31 Dec. 2015
30 Jun. 2016
ment Group again contributed to the very healthy
growth. The US portfolio companies are benefiting from
the continuing favourable market environment in the US.
TAKKT EUROPE recorded organic revenue growth of
6 per cent. The increase in revenue at the Business
Equipment Group was due in particular to strong growth
in Switzerland and Scandinavia, as well as eastern and
southern Europe. The German market also recorded
growth. In the Packaging Solutions Group, Ratioform
acquired the customers and inventories of the former
franchise partner in Austria at the beginning of the year.
The business recorded slight growth in the first half of
the year.
TAKKT EUROPE has resolved to terminate the activities
in the Chinese market allocated to the business due to
the poor growth outlook.
Significant improvement in operating profit
TAKKT increased its operating profit from EUR 65 million
in the first half of 2015 to EUR 81 million. This was due
to strong organic growth and the earnings contributions made by the acquisitions. Positive one-offs also
had an effect in both half-year periods. The net disposal
gain from the disposal of the Plant Equipment Group in
the year 2015 was partly offset in the reporting period
by even higher gains on the reduction of outstanding
29
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Majority investment TAKKT
variable purchase price liabilities for the Post-Up Stand
and BiGDUG acquisitions. In the case of both companies,
TAKKT no longer believes that the ambitious growth and
earnings figures on which the measurement of the variable liabilities had been based at first-time consolidation
will be achieved.
TAKKT records strong organic revenue growth
of 8 per cent and increased profitability.
digital@TAKKT builds on the DYNAMIC initiative
TAKKT made further progress in its DYNAMIC growth
and modernisation initiative in the first half of 2016. The
company is integrating various sales channels in order
to address customers as needed: through the catalogue,
online, by telephone and via employees in the external
sales force. The share of order intake accounted for by
e-commerce currently stands at 38 per cent, versus
35 per cent in the prior-year period.
TAKKT is focusing more closely on further digitalising
the business and in doing so is emphasising the major
strategic importance of digitalisation as a growth opportunity for the company. The company is leveraging the
digital@TAKKT initiative to further harness the current
and future opportunities offered by digitalisation. This
includes the development of a Digital Agenda that
includes specific measures to be implemented locally
for the individual businesses. This Digital Agenda will
form the basis for the company’s further growth over
the course of the digital transformation that is already
underway.
30
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Financial investment METRO GROUP
METRO GROUP
In the first half of 2016, the METRO
GROUP made further progress in its
strategic realignment and is planning
to split the group into two independent
companies. Revenue saw slight organic
growth year on year, and operating
profit increased due to lower one-off
factors. As a result, the Haniel Group’s
investment result from the METRO
GROUP was also above the level recorded in the prior-year period.
METRO GROUP plans demerger
In March 2016, the METRO GROUP announced plans to
split the group into two independent companies with
a specific focus on their respective market segments:
a wholesale and food specialist, and a company focusing
on consumer electronics and services. Both would be
separate German stock corporations with independent corporate profiles and their own management and
supervisory boards, and would be individually listed on
the stock exchange. Haniel supports these plans. The
planned demerger will yield new growth and development opportunities for the METRO GROUP.
Implementation of strategic initiatives stepped up
The METRO GROUP made significant progress with its
strategic initiatives in the first half of 2016. Delivery
revenue at METRO Cash & Carry increased by more than
15 per cent; this was also supported by Classic Fine
Foods (CFF), which was acquired in 2015. The acquisition
of leading premium food supplier Rungis Express marks
a milestone in METRO Cash & Carry’s transition towards
becoming Germany’s leading multi-channel food service
provider. Revenue generated online by both the Mediamarkt and Saturn brands at Media-Saturn increased by
an encouraging 35 per cent.
To ensure that it identifies new opportunities arising
from digitalisation in good time, the METRO GROUP
expanded its commitment to the start-up segment and
through METRO Accelerator powered by Techstars, at
its Berlin location will continue to promote digital and
technological innovations that could be groundbreaking
for the gastronomy sector in the future. Eleven interna-
tional start-ups took part in the first successful edition.
Media-Saturn has also extended its commitment to
start-ups with Spacelab, the Media Saturn Accelerator,
at its Munich location.
The planned demerger into two companies will
yield new growth and development opportunities
for the METRO GROUP.
In addition, in May 2016 METRO GROUP invested in Berlin-­
based start-up Orderbird, the leading iPad payment
solution for the gastronomy sector in German-speaking
countries, underscoring its commitment to digitalisation
in the gastronomy sector.
Slight organic revenue growth
The METRO GROUP’s revenue amounted to EUR 27,163
million in the first half of 2016, down 2 per cent on the
prior year. Organic revenue growth (adjusted for currency translation and portfolio effects; like-for-like) was
slightly up on the figure for the first half of 2015.
Revenue at METRO Cash & Carry fell by 4 per cent. This
was primarily due to the negative currency translation
effects in the prior year, in particular on the back of
the exchange rate trend of the Russian rouble and the
effects of selling the activities in Greece and Vietnam.
METRO Cash & Carry switched over to a new customer
segment-related reporting structure at the beginning
of 2016. The countries in the Horeca segment focus on
hotels, restaurants and caterers. The countries in the
Trader segment concentrate primarily on trade customers such as kiosks, bakeries, market stallholders
or butchers, while the countries in the Multispecialists
segment serve a wide range of customers. METRO Cash
& Carry generated slight organic revenue growth in the
first half of 2016, with positive contributions from the
Trader and Horeca segments in particular.
Media-Saturn increased revenue by 2 per cent – despite
negative currency translation effects in particular as
a result of the development of the rouble. The primary
causes were firstly organic growth in Germany and
eastern Europe, and secondly positive effects from
the acquisition of customer service and repair provider
31
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Financial investment METRO GROUP
RTS. In Germany, the business benefited in particular
from a new customer loyalty programme and the UEFA
European Championship. This enabled the company to
further expand its market share.
The Real sales division modernised further locations
in the first half of 2016 and improved its image with
customers. In addition, it increased its competitiveness
thanks to an agreement reached in collective wage
negotiations. Revenue decreased organically by 1 per
cent. Reported revenue declined by 4 per cent due to
the lower number of locations.
By contrast, the company made progress in its online
revenue. In addition, Real continued to invest in digital
expertise, for example through the acquisition of the
Hitmeister online shopping portal.
Increase in operating profit due to lower one-offs
After having generated an operating profit of EUR
-382 million during the same period of the previous year,
the METRO GROUP’s operating result in the first half
of 2016 amounted to EUR -70 million. This significant
growth was due to the higher one-off factors in the
prior-year period, when operating profit was adversely
affected primarily by impairment losses on goodwill at
Real Germany. By contrast, lower one-off factors were
recognised in the reporting period, in particular for
restructuring measures. Adjusted for these one-off facHANIEL INVESTMENT RESULT
EUR million
+50%
-60
-30
30 Jun. 2015
30 Jun. 2016
tors, operating profit amounted to EUR 164 million in the
first half of 2016, down on the adjusted operating profit
of EUR 191 million recorded in the prior-year period. This
reduction was chiefly attributable to negative currency
translation effects.
Higher earnings contribution for Haniel
The higher operating profit had a proportionate impact
on the investment result the Haniel Group derives from
the METRO GROUP. In addition, the METRO GROUP’s
net financial income improved. By contrast, the METRO
GROUP’s less favourable tax result as against the first
half of 2015 had an adverse effect. Haniel’s result from
the Metro investment increased overall from EUR -60
million in the same period of the previous year to EUR -30
million in the first half of 2016. As regards the negative
investment result of the first half of the year, it must also
be taken into consideration that the significantly positive
contribution to earnings from the Metro investment regularly does not occur until the Christmas season during the
fourth quarter of Haniel’s financial year.
32
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Report on expected developments
Report on expected developments
Haniel expects to be able to generate a significant year-on-year increase in operating
profit in financial year 2016. Despite the positive performance at TAKKT and CWS-boco,
Haniel is now expecting that organic revenue growth will fall short of the forecast. This
is due to the persistently difficult market environment in the cyclical ELG division. However, Haniel continues to expect positive earnings development in all divisions.
Increasing uncertainties in the macroeconomic
environment
The referendum in the United Kingdom, which resulted
in a vote to leave the European Union in the foreseeable
future, added a further element of uncertainty in forecasting future economic trends. At the same time, both
businesses and consumers are unnerved by geopolitical
tensions and their effects.
The International Monetary Fund (IMF) is currently
forecasting global gross domestic product (GDP) growth
of 3.1 per cent for full-year 2016, with a trend towards
decreasing momentum. Growth of 2.2 per cent is now
expected for the US, one of the key drivers of the global
economy. The IMF’s overall outlook for the euro zone has
been reduced to 1.6 per cent due to the Brexit vote. Germany, Spain and France are expected to provide the key
momentum. For Germany, the IMF forecasts economic
growth of 1.6 per cent. Ultimately, it was the United
Kingdom that faced a reduction in expectations. Despite
initially stabilising, the persistently low commodity
prices will continue to adversely affect the less-developed economies, with the IMF forecasting negative
growth for both Russia (-1.2 per cent) and Brazil (-3.3 per
cent). In contrast to previous year’s economic cooling,
growth in China could accelerate to 6.6 per cent on the
back of comprehensive economic stimulus packages.
Overall, there are implications for the Haniel Group’s
business development based on these assumptions,
primarily due to the reduced economic expectations for
the US and Europe, the forecast growth in China and the
potential repercussions of the Brexit vote.
Persistently difficult conditions in ELG’s market
environment
The development in the stainless steel market segment
is of central significance for the ELG division. For 2016,
experts assume that, on average, nickel prices will de-
crease significantly year on year. As a result, the market
conditions in the stainless steel segment – particularly
in the procurement market for stainless steel scrap –
will remain difficult. The commodity prices relevant to
ELG Utica Alloys are also expected to remain well below
the previous year’s average prices in 2016.
Since all divisions are active internationally, the results of
the Haniel Group depend on the development of various
exchange rates, particularly the US dollar, the British
pound and the Swiss franc. In addition, the result from
the Metro investment is impacted significantly by the
development of the Russian rouble. Deviations from the
assumed economic development and the future exchange rates compared to the planning assumptions may
significantly change the forecasts for revenue and profit.
Operating profit up in all divisions
The macroeconomic situation influences the divisions to
varying degrees. Currently, Haniel’s Management Board
continues to expect comparative growth in all divisions,
on condition that uncertainties outlined above do not
worsen the economic outlook.
2016 will be the first full financial year in which
BekaertDeslee is included in the Haniel Group, and the
division is now expecting revenue of well over EUR 300
million. The significant improvement in the forecast is
due to the acquisition of the DesleeClama Group, the
successful integration of which will be continued quickly
and systematically, and its contribution to revenue in
2016. The division continues to anticipate operating
profit in the order of EUR 30 million. It should be taken
into account that this is weighed down by the scheduled
amortisation arising from the purchase price allocations
amounting to EUR 10 million.
CWS-boco continues to expect revenue in the lower
single-digit percentage range for financial year 2016,
33
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Report on expected developments
adjusted for business combinations and disposals as
well as currency translation effects. In order to achieve
this, the division is systematically pursuing its sales
initiative. Besides, CWS-boco aims to further maintain
contract cancellation rates at the present low level. The
division also continues to expect a slight increase in
operating profit based on these assumptions. The intention is to offset the costs resulting from the intensified
sales initiative and other investments in the future with
earnings contributions from the increase in revenue.
growth initiative. DYNAMIC aims to integrate different
sales channels in order to address customers as needed:
As part of the further digitalisation of the business
model, TAKKT intends to generate growth in its business
with new and existing customers by offering new products and services. The company is leveraging digital@
TAKKT to further harness the current and future opportunities offered by digitalisation. A Digital Agenda is also
being developed; this includes specific measures to be
implemented locally for the individual businesses.
The ELG division continues to anticipate a difficult market environment in 2016. For instance, the key relevant
commodity prices (such as the nickel price) are expected
to be significantly further below the previous year’s
average price than was expected at the beginning of the
year; this is due to the weak development at the start
of 2016. In this market environment, the availability of
scrap metal for procurement will also fall short of the
expectations for 2016. Against this backdrop, ELG now
assumes a decline in the high single-digit percentage
range for output tonnage in stainless steel scrap recycling. Despite the continuing robust demand in the toll
process business, output tonnage at ELG Utica Alloys
will only be slightly above the prior-year figure, thus
falling short of the original forecast. Based on these
assumptions and in contrast to the forecast at the
beginning of 2016, ELG is expecting a significant decline
in revenue due to price- and volume-related factors. ELG
continues to expect that operating profit will return to
positive territory thanks to the year-on-year improvement in the gross margin, a strict cost management
programme and the lack of adverse effects caused by
one-offs. As development on the commodity markets
is very volatile, ELG’s revenue and operating profit may
also deviate significantly from this forecast, however.
For the financial investment in the METRO GROUP,
Haniel expects slight organic revenue growth – like-forlike; adjusted for business combinations and disposals
and currency translation effects. This is also expected to
be driven by the METRO Cash & Carry and Media-Saturn
sales divisions. Furthermore, the METRO GROUP will
retain a sharp focus on efficient structures and strict
cost control. In addition, Haniel expects a slight increase
in operating profit before one-off factors and adjusted
for currency translation effects for the METRO GROUP.
The result from the Metro investment included in the
investment result may be lower year on year, contrary to
the previous forecast. This is due on the one hand primarily to negative currency translation effects, particularly with respect to the Russian rouble. On the other,
Haniel expects earnings to be weighed down in connection with the METRO GROUP demerger, which the Haniel
Management Board supports in full.
TAKKT recorded strong organic growth in the first half
of the year. The company is expecting growth to slow in
the second half of 2016 due to the increasing political
and economic uncertainties. In this context, TAKKT continues to expect organic revenue growth (i.e., adjusted
for currency translation effects and business combinations and disposals) in the single-digit percentage
range. Operating profit is expected to continue increasing moderately. TAKKT will systematically pursue the
digital@TAKKT initiative, which builds on the DYNAMIC
Haniel continues to expect a significant increase in
operating profit in financial year 2016.
Haniel expects sharp growth in all earnings figures
Haniel continues to expect that the Haniel Group’s operating profit will increase sharply in 2016. Despite an encouraging performance by nearly all divisions, Haniel’s Management Board no longer assumes that revenue, adjusted
for business acquisitions and currency translation effects,
will remain level year-on-year in financial year 2016, but
rather that it will decline in the single-digit percentage
range due to the weaker outlook for ELG. In this context,
the significant revenue decline at ELG cannot be offset by
the additional revenue contributions by the new BekaertDeslee division or organic growth at all other divisions.
34
Haniel half-year financial report 2016 / Haniel Group interim management report / Report on business situation /
Report on expected developments
As forecast, the Haniel Group’s operating profit is also
expected to significantly exceed the prior-year figure
due to the improved operating profit in all divisions.
In line with the operating profit, Haniel’s Management
Board continues to expect sharp growth in profit before
taxes. The forecast for profit after taxes also remains
unchanged. Based on these assumptions, the expectation is of a significant increase in profit after taxes in the
current year, in line with the forecast.
The development in profit after taxes is reflected in the
value-oriented performance indicators, Haniel value
added (HVA) and return on capital employed (ROCE).
The forecast is identical for HVA and ROCE, i.e., a slight
rise as against the previous year. The assumption
remains that the Haniel cash flow will benefit from the
positive earnings development and, as planned, will be
up year on year in 2016.
For the existing business, Haniel’s Management Board
plans capital expenditure for property, plant and
equipment and intangible assets to be up slightly year
on year in 2016. Aside from replacement investments,
this increase continues to be driven in particular by the
further modernisation of the IT systems of CWS-boco
and TAKKT. Although the acquisition activity in the first
half of 2016 resulted in lower capital expenditure, Haniel
and the divisions continue to work predominantly on
completing attractive subsequent business combinations, a successful example of which is the DesleeClama
Group acquisition. This is capable of having a material
influence on the volume of capital expenditure.
35
Consolidated Interim
Financial Statements
38
40
41
42
43
44
Statement of financial position
Income statement
Statement of comprehensive income
Statement of changes in equity
Statement of cash flows
Condensed segment reporting
45
Selected explanatory notes
38
Haniel half-year financial report 2016 / Consolidated interim financial statements
Haniel Group
Statement of financial position
ASSETS
EUR million
Property, plant and equipment
30 Jun. 2016
31 Dec. 2015
572
547
Intangible assets
1,433
1,389
Investments accounted for at equity
2,438
2,562
595
659
Financial assets
Other non-current assets
32
32
Deferred taxes
59
48
5,129
5,237
Inventories
441
480
Trade receivables
493
401
Financial assets
255
231
Non-current assets
Income tax assets
72
36
244
342
Other current assets
92
118
Assets held for sale
0
2
Current assets
1,597
1,610
Total assets
6,726
6,847
Cash and cash equivalents
39
Haniel half-year financial report 2016 / Consolidated interim financial statements
EQUITY AND LIABILITIES
EUR million
Equity of shareholders of Franz Haniel & Cie. GmbH
Non-controlling interests
30 Jun. 2016
31 Dec. 2015
3,806
3,943
229
226
4,035
4,169
Financial liabilities
597
1,037
Pension provisions
398
323
Other non-current provisions
70
81
Other non-current liabilities
9
17
124
115
Non-current liabilities
1,198
1,573
Financial liabilities
1,040
643
Current provisions
75
95
152
137
Equity
Deferred taxes
Trade payables and similar liabilities
Income tax liabilities
Other current liabilities
Liabilities held for sale
21
22
205
208
0
0
Current liabilities
1,493
1,105
Total equity and liabilities
6,726
6,847
40
Haniel half-year financial report 2016 / Consolidated interim financial statements
Haniel Group
Income statement
1ST HALF-YEAR
EUR million
Revenue
Changes in inventories and own work capitalised
2016
2015
1,800
1,982
3
3
Gross revenue
1,803
1,985
Cost of materials
1,052
1,303
751
682
Gross profit
Other operating income
17
12
Total operating income
768
694
Personnel expenses
328
295
Other operating expenses
232
210
208
189
93
80
Depreciation and amortisation
Impairment of goodwill
0
0
Operating profit
115
109
Result from investments accounted for at equity
-30
-60
Other investment result
Finance costs
Other net financial income
Net financial income
-1
0
43
47
16
11
-58
-96
Profit before taxes
57
13
Income tax expenses
32
34
Profit after taxes
25
-21
of which attributable to non-controlling interests
28
21
of which attributable to shareholders of Franz Haniel & Cie. GmbH
-3
-42
41
Haniel half-year financial report 2016 / Consolidated interim financial statements
Haniel Group
Statement of comprehensive income
1ST HALF-YEAR
EUR million
2016
2015
25
-21
Remeasurements of defined benefit plans recognised in other comprehensive income
-70
28
Deferred taxes on remeasurements of defined benefit plans recognised in other comprehensive income
20
-9
-50
19
Pro-rata other comprehensive income not to be reclassified to profit or loss from investments
accounted for at equity
-11
44
Total other comprehensive income not to be reclassified to profit or loss
-61
63
Profit after taxes
Remeasurements of defined benefit plans
-3
-1
Reversals recognised in profit or loss
Income and expenses recognised in equity from remeasurement of derivative financial instruments
1
2
Deferred taxes on remeasurement of derivative financial instruments
1
0
Remeasurement of derivative financial instruments
-1
1
Income and expenses recognised in equity from remeasurement of financial assets available for sale
6
0
Reversals recognised in profit or loss
0
0
-2
0
Deferred taxes on remeasurement of financial assets available for sale
Remeasurement of financial assets available for sale
Income and expenses recognised in equity from foreign currency translation
Reversals recognised in profit or loss
Currency translation effects
Income and expenses recognised in equity from changes recognised directly in equity
of investments accounted for at equity
Reversals recognised in profit or loss
Other comprehensive income from investments accounted for at equity
Total other comprehensive income to be reclassified to profit or loss and reversals recognised
in profit or loss
Total other comprehensive income
of which attributable to non-controlling interests
of which attributable to shareholders of Franz Haniel & Cie. GmbH
Comprehensive income
of which attributable to non-controlling interests
of which attributable to shareholders of Franz Haniel & Cie. GmbH
4
0
-22
36
0
3
-22
39
-8
22
0
34
-8
56
-27
96
-88
159
-8
12
-80
147
-63
138
20
33
-83
105
42
Haniel half-year financial report 2016 / Consolidated interim financial statements
Haniel Group
Statement of changes in equity
1ST HALF-YEAR 2016
EUR million
As at 1 Jan. 2016
Subscribed
capital
Capital
reserve
Accumulated
other
comprehensive
income
Retained
earnings
Treasury
shares
Equity
of share­
holders of
Franz Haniel
& Cie. GmbH
Noncontrolling
interests
Equity
1,000
678
-432
2,708
-11
3,943
226
4,169
-50
-17
-67
Dividends
-50
Changes in
the scope of
consolidation
0
0
Changes in
shares in companies already
consolidated
0
0
Capital measures
0
0
-4
-4
-4
Changes in
treasury shares
Comprehensive
income
As at 30 Jun. 2016
-80
-3
-83
20
-63
1,000
678
-512
2,655
-15
3,806
229
4,035
Subscribed
capital
Capital
reserve
Accumulated
other
comprehensive
income
Retained
earnings
Treasury
shares
Equity
of share­
holders of
Franz Haniel
& Cie. GmbH
Noncontrolling
interests
Equity
1,000
678
-590
2,709
-7
1ST HALF-YEAR 2015
EUR million
As at 1 Jan. 2015
Dividends
Changes in
the scope of
consolidation
40
3,790
183
3,973
-40
-40
-11
-51
-40
0
0
Changes in
shares in companies already
consolidated
0
0
Capital measures
0
0
-4
-4
-4
105
33
138
-11
3,851
205
4,056
Changes in
treasury shares
Comprehensive
income
As at 30 Jun. 2015
1,000
678
147
-42
-403
2,587
43
Haniel half-year financial report 2016 / Consolidated interim financial statements
Haniel Group
Statement of cash flows
1ST HALF-YEAR
EUR million
2016
2015
Profit after taxes
25
-21
Depreciation and amortisation, impairment losses and reversals on non-current assets
94
80
Change in pension provisions and other non-current provisions
-7
-1
Income/expenses from changes in deferred taxes
3
10
Non-cash income/expenses and dividends of investments accounted for at equity
111
147
Gains/losses from the disposal of non-current assets and consolidated companies and from remeasurement for
changes in shares
-1
-4
Other non-cash income/expenses and other payments
8
-7
Haniel cash flow
233
204
Change in inventories, receivables and similar assets
-46
105
Change in current non-interest-bearing liabilities, current provisions and similar liabilities
-23
-66
Cash flow from operating activities
164
243
Proceeds from the disposal of property, plant and equipment, intangible assets and other assets
151
519
Payments for investments in property, plant and equipment, intangible assets and other assets
-186
-443
Proceeds from the disposal of consolidated companies and other business units
Payments for acquisitions of consolidated companies and other business units
Cash flow from investing activities
Proceeds from contributions to equity
Payments to shareholders
Payments from changes in shares in companies already consolidated
1
17
-89
-311
-123
-218
0
0
-69
-51
0
0
308
776
Repayments of financial liabilities
-376
-472
Cash flow from financing activities
-137
253
Proceeds from issuance of financial liabilities
Cash and cash equivalents at the beginning of the period
342
111
Increase/decrease in cash and cash equivalents
-96
278
Non-cash increase/decrease in cash and cash equivalents
Cash and cash equivalents at the end of the period
-2
1
244
390
The cash flow from operating activities includes dividends received in the amount of EUR 81 million (previous year:
EUR 87 million), interest income of EUR 19 million (previous year: EUR 5 million) and interest payments of EUR 48
million (previous year: EUR 50 million). EUR 35 million was paid in income taxes (previous year: EUR 29 million).
44
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
Haniel Group
Condensed segment reporting
1ST HALF-YEAR 2016 BY DIVISION
EUR million
Segment revenue from external customers
Bekaert CWS-boco
Deslee
ELG
TAKKT
Metro
investment
Holding
and
other
companies
Consolidation
146
393
707
554
146
393
707
554
0
0
0
1,800
10
37
2
81
0
-15
0
115
6
32
-7
76
-30
-7
-13
2,337
7,608
1,188
2,485
0
211
Bekaert CWS-boco
Deslee
ELG
TAKKT
Metro
investment
Holding
and
other
companies
1,800
Segment revenue from transactions
with other segments
Revenue
Operating profit
0
Result from investments accounted for
at equity
Profit before taxes
Employees (average headcount)
Group
-30
-30
57
13,829
1ST HALF-YEAR 2015 BY DIVISION
EUR million
Segment revenue from external customers
Consolidation
20
382
1,074
506
20
382
1,074
506
0
0
0
1,982
2
36
11
65
0
-5
0
109
0
30
0
61
-60
-6
-12
1,498
7,574
1,301
2,348
0
217
1,982
Segment revenue from transactions
with other segments
Revenue
Operating profit
0
Result from investments accounted for
at equity
Profit before taxes
Employees (average headcount)
Group
-60
-60
13
12,938
45
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
Selected explanatory notes
Accounting principles
The consolidated interim financial statements of Franz Haniel & Cie. GmbH, Duisburg, as at 30 June 2016 were prepared in accordance with the International Financial Reporting Standards (IFRSs) in effect on the reporting date and
adopted by the Commission of the European Union.
The consolidated interim financial statements have been prepared in accordance with IAS 34 and the further provisions relating to interim financial reporting. With the exception of the amendments and revisions described below,
the accounting policies applied correspond to those applied in preparing the consolidated financial statements as at
31 December 2015. Please refer to the consolidated financial statements of Franz Haniel & Cie. GmbH as at 31 December 2015 for further information on the individual accounting policies applied.
Neither the consolidated interim financial statements nor the Haniel Group interim management report have been
audited or reviewed.
New accounting standards and interpretations
The following standards and interpretations that were revised or newly-issued by the International Accounting Standards Board (IASB) or the IFRS Interpretations Committee (IFRS IC), as adopted by the Commission of the European
Union, were applicable for the first time beginning with the 2016 financial year:
Amendments to IFRS 11 (2014): “Accounting for Acquisitions of Interests in Joint Operations”
Amendments to IAS 1 (2014): “Disclosure Initiative”
Amendments to IAS 16 and IAS 38 (2014): “Clarification of Acceptable Methods of Depreciation and Amortisation”
Amendments to IAS 16 and IAS 41 (2014): “Agriculture: Bearer Plants”
Amendments to IAS 19 (2013): “Defined Benefit Plans – Employee Contributions”
Amendments to IAS 27 (2014): “Equity Method in Separate Financial Statements”
Annual Improvements to IFRSs 2010-2012 Cycle (2013)
Annual Improvements to IFRSs 2012-2014 Cycle (2014)
The first-time application of the new or revised standards in the reporting period did not give rise to any effects on
the presentation of the Haniel Group’s net assets, financial position, and results of operations.
Scope of consolidation
Aside from Franz Haniel & Cie. GmbH, 190 domestic and foreign companies were included in full in the consolidated
financial statements as at 31 December 2015. In the reporting period, the number of subsidiaries changed as follows:
Additions due to acquisition of shares or obtaining control
16
Additions due to new company formation
5
Disposals due to sale of shares or loss of control
0
Disposals due to mergers or liquidation
0
Accordingly, in addition to Franz Haniel & Cie. GmbH, a total of 211 subsidiaries are included in the consolidated
interim financial statements as at 30 June 2016. Of that figure, 34 companies belong to the BekaertDeslee division, 41 to CWS-boco, 49 to ELG and 77 to TAKKT. 10 subsidiaries are allocated to the Holding and other companies
segment.
46
Haniel half-year financial report 2016/ Consolidated interim financial statements / Selected explanatory notes
Business combinations
Haniel obtained control over 3 companies or groups of companies in the BekaertDeslee, CWS-boco and TAKKT divisions
during the reporting period. In total, 16 individual firms were acquired. A 100 per cent interest was acquired in each of
these companies.
Of the companies or groups of companies acquired, the acquisition of the DesleeClama Group as at 29 February 2016
in the Bekaert Textiles division classifies as material from the Haniel Group’s perspective. DesleeClama is a leading
and established company for the development and manufacturing of mattress textiles, and is domiciled in Zonnebeke,
Belgium. Since acquiring the DesleeClama Group, the division has been operating under the new name BekaertDeslee.
The merger of the two companies serves to strengthen the division’s global market position for the long-term.
The total assets and liabilities acquired through business combinations in the reporting period are comprised as
follows:
Fair values
EUR million
DesleeClama
Other
acquisitions
Total
Assets
Property, plant and equipment
42
Intangible assets
40
Deferred taxes
42
2
42
1
1
Inventories
21
21
Trade receivables
20
20
Cash and cash equivalents
Other assets
4
4
10
10
138
2
140
Liabilities
Financial liabilities
40
40
Deferred taxes
16
16
Trade payables and similar liabilities
16
16
Income tax liabilities
1
1
Other liabilities
5
78
5
0
78
The gross contractual amount of the acquired trade receivables is EUR 21 million. Taking into account the expectation
that an amount of EUR 1 million will not be recoverable, the fair value of the acquired trade receivables amounts to EUR
20 million.
47
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
The consideration transferred for the business combinations and the resulting goodwill are presented in the table
below:
EUR million
Consideration paid
DesleeClama
Other
acquisitions
Total
88
1
89
1
1
Contingent consideration
Cash and cash equivalents acquired
4
4
Consideration transferred
92
2
94
Net assets acquired
60
2
62
Goodwill
32
0
32
The reported goodwill essentially represents the future prospects accompanying the business combinations and the
expertise of the workforce acquired. The recognised goodwill is not tax deductible.
The transaction costs incurred in the context of the business combinations totalled EUR 1 million and are included in
other operating expenses. The transaction costs related primarily to the acquisition of DesleeClama.
Contingent consideration was agreed for one of the business combinations. At the acquisition date, this contingent
consideration was recognised as a liability with a fair value of EUR 1 million. The final amount of this contingent
consideration depends on whether the acquired company meets certain revenue targets in financial year 2016. At
present, the possible payments range between EUR 0 million and EUR 1 million.
The companies or groups of companies acquired contributed EUR 37 million to revenue and EUR 1 million to profit
after taxes during the reporting period. Of those amounts, EUR 34 million and EUR 1 million, respectively, were attributable to DesleeClama. If each of the companies had been acquired with effect from the beginning of the reporting
period, they would have contributed EUR 54 million to revenue and EUR 2 million to profit after taxes. DesleeClama
would have contributed EUR 51 million to revenue and EUR 2 million to profit after taxes.
48
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
Contingent consideration recognised as a liability from business combinations developed as follows in the reporting
period:
EUR million
As at 1 Jan.
Additions
12
1
Settlements
Foreign exchange rate adjustments
Interest effect
-1
1
Revaluations
-8
As at 30 Jun.
5
The fair value of the contingent consideration is determined on the basis of revenue and earnings targets, taking into
account long-term business planning. During the reporting period, the TAKKT division remeasured contingent consideration from business combinations of the previous year. The responsible management no longer believes that the
ambitious growth and earnings figures on which the initial measurement of these contingent considerations had been
based at first-time consolidation will be achieved. The remeasurement resulted in the recognition of EUR 8 million
under other operating income during the reporting period. The possible payments, translated at closing rates, for the
contingent consideration as at the reporting date range between EUR 0 million and EUR 20 million. The value of the
contingent consideration is determined on a regular basis by qualified employees of the relevant units and discussed
with the responsible management.
Contingent liabilities
The contingent liabilities have not changed significantly since 31 December 2015.
Fair value measurement
The table below shows the assets and liabilities measured at fair value in the statement of financial position as at
30 June 2016, classified by the following input levels:
Level 1:Quoted prices in active markets for the identical asset or liability
Level 2:Quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all
significant inputs are based on observable market data
Level 3:Valuation techniques for which significant inputs are not based on observable market data
If assets and liabilities recurrently measured at fair value must be reclassified between the various levels because, for
example, an asset is no longer traded in an active market or is traded for the first time, the reclassification is made at
the end of the reporting period. No transfers between Levels 1 and 2 took place during the reporting period.
49
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
EUR million
Total
30 Jun. 2016
Level 1
566
561
Level 2
Level 3 Not measured
at fair value
Assets
Recurring fair value measurement
Non-current financial assets
Financial assets available for sale
Financial assets measured at fair value through profit or loss
5
6
6
Current financial assets
Financial assets available for sale
207
207
119
119
Cash and cash equivalents
Money market funds
Other current assets
Derivative financial instruments
3
3
Non-recurring fair value measurement
Assets held for sale
0
Liabilities
Recurring fair value measurement
Other non-current liabilities
Contingent consideration from business combinations
4
4
Other current liabilities
Derivative financial instruments
Contingent consideration from business combinations
49
1
49
1
50
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
The table below shows the assets and liabilities measured at fair value in the statement of financial position as at
31 December 2015:
EUR million
Total
31 Dec. 2015
Level 1
Level 2
Level 3 Not measured
at fair value
641
617
20
4
Assets
Recurring fair value measurement
Non-current financial assets
Financial assets available for sale
Financial assets measured at fair value through profit or loss
0
Current financial assets
Financial assets available for sale
212
212
219
219
Cash and cash equivalents
Money market funds
Other current assets
Derivative financial instruments
8
8
2
2
Non-recurring fair value measurement
Assets held for sale
Liabilities
Recurring fair value measurement
Other non-current liabilities
Contingent consideration from business combinations
12
12
Other current liabilities
Derivative financial instruments
Contingent consideration from business combinations
52
52
0
The financial assets available for sale category includes securities and investments in the amount of EUR 5 million (31 December 2015: EUR 4 million) that are recognised at amortised cost. These were primarily investments in
non-listed companies. It is not possible to reliably measure the fair value of these investments for lack of an active
market.
The fair value of financial instruments traded in an active market (Level 1) is based on the quoted prices as at the reporting date. The fair values of assets and liabilities recurrently measured at fair value within Level 2 and Level 3 are
determined using the DCF method. Expected future cash flows from the financial instruments are discounted using
market interest rates with matching maturities. Haniel takes into account the creditworthiness of the respective borrower by determining Credit Value Adjustments (CVA) or Debt Value Adjustments (DVA) based on a premium/discount
method. If available, the CVA or DVA is determined using observable market prices for credit derivatives.
51
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
The following table presents a detailed reconciliation of the assets and liabilities recurrently measured at fair value
within Level 3, excluding contingent consideration from business combinations. This reconciliation relates to venture
capital funds in the Holding and other companies segment which are managed on a fair value basis. The venture
capital funds are measured in accordance with the adjusted net asset method. Under this method, the fair values
of the individual investments are measured by the funds on the basis of recognised valuation methods before being
aggregated and adjusted by an appropriate illiquidity discount for the overall fund.
EUR million
2016
2015
As at 1 Jan.
0
0
Foreign exchange rate adjustments
0
0
Change in the scope of consolidation
0
0
Additions
7
0
Fair value changes recognised in profit or loss
-1
0
Disposals
0
0
Transfers into Level 3
0
0
Transfers out of Level 3
0
0
As at 30 Jun.
6
0
Unrealised gains or losses recognised in profit or loss relating to those financial instruments
held at the reporting date
-1
0
The table below shows the fair values of the financial instruments as at 30 June 2016 that are not recognised at fair
value in the statement of financial position:
Carrying
amounts
Fair value
EUR million
Level 1
Level 2
Assets
Non-current financial assets
Other securities
10
10
Loans
13
15
Liabilities
Financial liabilities
Liabilities due to banks
Bonds, commercial paper and other securitised debt
Liabilities to shareholders
262
1,081
154
263
479
662
159
Lease liabilities
41
53
Other financial liabilities
99
103
3
3
Other non-current liabilities
Purchase price liabilities (not contingent)
Level 3
52
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
The table below shows the fair values of the financial instruments as at 31 December 2015 that were not recognised
at fair value in the statement of financial position:
Carrying
amounts
Fair value
EUR million
Level 1
Level 2
Level 3
Assets
Non-current financial assets
Other securities
Loans
5
5
13
15
Liabilities
Financial liabilities
Liabilities due to banks
Bonds, commercial paper and other securitised debt
Liabilities to shareholders
310
1,091
148
311
503
655
155
Lease liabilities
34
45
Other financial liabilities
97
102
3
3
Other non-current liabilities
Purchase price liabilities (not contingent)
The fair value of financial instruments traded in an active market (Level 1) is based on the quoted prices as at the
reporting date. The fair values for Levels 2 and 3 are measured analogously to the method for assets and liabilities
recurrently measured at fair value using the DCF method.
Notes to the statement of cash flows
The statement of cash flows shows the changes in the Haniel Group’s cash and cash equivalents in the course of the
reporting period resulting from cash inflows and outflows. The statement of cash flows is divided into cash flow from
operating, investing and financing activities. The cash and cash equivalents reported at the reporting date are the
total of bank balances with an original maturity of less than three months, cash on hand and cheques, and money
market funds, and are identical to the cash and cash equivalents reported in the statement of financial position.
The cash flow from operating activities is determined indirectly on the basis of the profit after taxes and essentially
contains sales-related payments, dividends from investments accounted for at equity, interest paid and received as
well as tax payments. Haniel’s internal cash earnings indicator used for management purposes, Haniel cash flow, is
shown as a separate line item. Haniel cash flow is the profit after taxes, adjusted for all material non-cash income
and expenses, and non-recurring, non-operating income and expenses, plus other cash components. Haniel cash flow
consequently corresponds to the cash flow from operating activities excluding changes in current net assets.
53
Haniel half-year financial report 2016 / Consolidated interim financial statements / Selected explanatory notes
The cash flow from investing activities includes payments for purchases and disposals of individual assets as well as
for consolidated companies and other business units. In the previous financial year, the proceeds from the disposal of
property, plant and equipment, intangible assets and other assets included proceeds from the disposal of 16.25 million ordinary shares in METRO AG.
In addition to payments for business combinations conducted in the reporting period, the payments for acquisitions
of consolidated companies and other business units in the previous year included a EUR 53 million payment to settle
a purchase price liability relating to a previous business combination in the TAKKT division.
The cash flow from financing activities comprises payments in connection with shareholder transactions as well as
financial liabilities. The shareholder transactions essentially include payments to shareholders and payments from
changes in shares in companies already consolidated. Payments to shareholders comprise dividend payments to the
shareholders of Franz Haniel & Cie. GmbH in the amount of EUR 50 million (previous year: EUR 40 million) and payments for the purchase of treasury shares in the amount of EUR 3 million (previous year: EUR 0 million).
In the previous year Haniel issued an exchangeable bond linked to ordinary shares in METRO AG with a nominal
amount of EUR 500 million and a 5-year term. The right of the bondholders to exchange the bond for shares is
reported separately from the actual bond under other current liabilities in the statement of financial position as a
derivative financial instrument carried at fair value. The bond itself is reported under current financial liabilities in
accordance with IAS 1.69(d). All of the proceeds from issuance of the exchangeable bond, including transaction costs,
were reported in the previous year under proceeds from issuance of financial liabilities.
Notes to the segment reporting
In the segment reporting, the reportable segments are the four divisions, the investment in METRO AG accounted
for at equity and the Holding and other companies segment. The Holding and other companies segment essentially
comprises the Franz Haniel & Cie. GmbH and its financing companies, excluding the Metro investment.
The segments are defined using the management approach, taking internal monitoring and reporting, as well as the
organisational structure, into account. The same accounting standards are used for segment reporting and for the
consolidated interim financial statements.
Events after the reporting date
No reportable events took place after the reporting date.
54
Haniel half-year financial report 2016 / Responsibility statement
Responsibility statement
To the best of our knowledge, and in accordance with the applicable accounting principles for interim financial reporting, the consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group, and the Group interim management report includes a fair review of the development
and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Duisburg, 26 August 2016
The Management Board
Gemkow
Funck
56
Haniel half-year financial report 2016 / Contact
Contact
Franz Haniel & Cie. GmbH
Franz-Haniel-Platz 1
47119 Duisburg
Germany
Telephone +49 203 806 - 0
[email protected]
www.haniel.de/en
CWS-boco International GmbH
Franz-Haniel-Platz 6 – 8
47119 Duisburg
Germany
Telephone +49 203 9871658000
[email protected]
www.cws-boco.com
TAKKT AG
Presselstrasse 12
70191 Stuttgart
Germany
Telephone +49 711 3465 - 80
[email protected]
www.takkt.com
BekaertDeslee Holding N.V.
Deerlijkseweg 22
8790 Waregem
Belgium
Telephone +32 56624111
[email protected]
www.bekaertdeslee.com
ELG Haniel GmbH
Kremerskamp 16
47138 Duisburg
Germany
Telephone +49 203 4501 - 0
[email protected]
www.elg.de
METRO AG
Metro-Strasse 1
40235 Düsseldorf
Germany
Telephone +49 211 6886 - 4252
[email protected]
www.metrogroup.de
58
Haniel half-year financial report 2016 / Publication details
Publication details
Responsible for the content
Franz Haniel & Cie. GmbH
Franz-Haniel-Platz 1
47119 Duisburg
Germany
Telephone +49 203 806 - 0
[email protected]
www.haniel.de/en
Concept and design
BWKD, Cologne
Editing
Thomas Krause, Krefeld
Production
Druckpartner, Essen
Ident-No. 1658403
Printed with a zero carbon footprint on recycled paper made entirely from waste paper.
This Haniel half-year financial report is published in German and English. Both versions are available
online for download at www.haniel.de. The German version is controlling. All statements in this brochure
with regard to occupations and target groups apply, always and irrespective of the formulation, to both
male and female persons.
08/16 – d/200 – e/50
haniel.de/en