Annual report 2014

Options for sustainable and profitable growth

The Haniel Group enjoys a large number of options for entrepreneurial action. The Holding Company and divisions continually search for possibilities that secure sustainable and profitable growth. The opportunities identified in the Haniel Group are listed below.

Optimising the business portfolio: Haniel continually reviews the strategic alignment of its portfolio. New divisions should be able to make a long-term value contribution to the economic success of the Group and be in accordance with its ecological and social values. The Holding Company follows two parallel approaches in this regard. On the one hand, it analyses the potential of various sectors and markets on the basis of global megatrends with the objective of identifying and contacting attractive companies. On the other hand, the Holding Company continually reviews current takeover offers. Based on this, the Haniel investment portfolio will be developed further by business acquisitions and disposals in order to enhance value creation while always maintaining a solid financing structure.

International expansion: All Haniel divisions are widely represented in western Europe, and ELG and TAKKT in North America as well, and enjoy a strong position there with their various business models. Haniel sees opportunities for further growth by strengthening its presence in these markets and in the fast-growing economies throughout the world – either by founding or acquiring businesses. The divisions are already active in various ways in eastern Europe, and will further expand their presence there. The other regions, in particular Asia, offer many different expansion opportunities.

Sustainability as a competitive factor: Corporate responsibility has a long tradition in the Haniel Group. It is expressed in its striving to increase economic value in accordance with ecological and social contributions. In order to live up to this vision, Haniel has identified three action areas in the field of sustainability: employees, value chain and innovation. Each of the divisions and the Holding Company are responsible for improving on these areas of emphasis, regardless of their respective business model and taking into account their unique features, with the overarching objective of developing the potential for additional profitable growth. You can find detailed information on the subject of sustainability in the Haniel Group in the Corporate Responsibility.

Multi-channel activities: Continuing digitalisation gives rise to growth opportunities through the consistent expansion of METRO GROUP’s retail and wholesale activities and of TAKKT’s mail-order business into a multi-channel business. These growth opportunities at the METRO GROUP reside in the dovetailing of the stationary business with the e-commerce activities. The METRO GROUP can create real added value for the customer on this basis. TAKKT, the specialist mail-order company, is strengthening its existing distribution channels, including catalogue, telemarketing, field service and e-commerce, and improving the links between them. TAKKT is thus developing into a multi-channel company, whose offerings are present wherever customers inform themselves about products and make purchasing decisions. This is opening up opportunities for additional growth.

Increasing demand for raw materials: ELG’s core business is the trading and recycling of raw materials, particularly for the stainless steel market segment. Growth opportunities for ELG result from increasing global demand for stainless steel products that is anticipated over the medium and long term. It must also be assumed that the superalloys segment will continue to gain significance. In this sector, ELG recycles very high-grade materials. These include in particular titanium scrap and high-alloy, nickel-containing scrap which are used in, e.g., the aerospace industry and energy generation. ELG has strengthened this area of operations by making acquisitions in recent years, thus significantly expanding its foundation for future growth. In addition to trading in stainless steel scrap and superalloys, ELG is active in the nascent business of recycling carbon fibres. ELG is planning to expand this innovative business model further.

From an overall perspective, there remain a number of opportunities open to the Haniel Group for sustainable and profitable growth in the future. While the Celesio disposal removed the opportunities related to that division – in particular the opportunity resulting from the growing demand for healthcare services – the Haniel Holding Company hence has sufficient financial resources for acquiring new attractive business segments that offer many new opportunities.