Annual report 2014

Stable macroeconomic environment

The International Monetary Fund (IMF) expects gross domestic product to grow globally by 3.5 per cent in 2015, which would thus be just above the 2014 level of 3.3 per cent. This estimate already factors in the economic slowdown observed in the second half of 2014. Based on the current forecast, the Haniel Management Board is confident going into the new financial year, particularly as the markets in which Haniel divisions are active are expected to see somewhat better economic development than in the previous year: For example, the US, with forecast growth of 3.6 per cent following 2.4 per cent in 2014, may also be the primary driver of global growth in 2015. In addition, following euro zone growth of 0.8 per cent in 2014, the IMF is forecasting somewhat higher growth of 1.2 per cent for 2015. Not only Germany is expected to contribute to this growth with 1.3 per cent, but also France and Italy, whose economies have recently been weaker. Development in the euro zone is of special significance for all divisions because a considerable portion of their business activities takes place there.

For ELG, the development of the stainless steel market is also key. Global production of stainless steel in 2015 is anticipated to grow by about 5 per cent, which is attributable in particular to increasing production figures in China, but also in the US. In Europe, however, production of stainless steel is expected to remain at the previous year’s level. With regard to nickel, an important commodity for the stainless steel business, experts expect a shortage in 2015 as a result of the Indonesian export restrictions on nickel ore – and thus a higher nickel price level.

However, the Haniel Management Board also sees significant risks for economic development in 2015: In addition to the debt crisis in the euro zone, for which a long-term solution has not yet been found, hotbeds of regional conflict have formed or strengthened, among other things. Such threats have the potential to contribute to a significant worsening of the global economic trend. Since the various divisions are active internationally, the results of the Haniel Group also depend on the development of various exchange rates, particularly the US dollar, the British pound and the Swiss franc. In addition, the Metro investment result 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 could significantly change the forecast Haniel Group’s profit.