Annual report 2014

Significant increase in Group Profit

Overall, Haniel expects the Group to generate revenue growth, adjusted for currency translation effects, in the single-digit percentage range in financial year 2015. This forecast is based in particular on ELG’s expectation of significantly higher revenue. Operating profit is expected to experience a moderate increase, driven by higher operating profit at the divisions. Profit before taxes is expected to increase considerably. In addition to the increase in operating profit, this will derive in particular from a noticeable improved result from financing activities. This income was weighed down significantly in the 2014 financial year by bond redemptions by the Haniel Holding Company. In 2015 this will lead to considerable savings on interest, which will contribute clearly to an increase in profit before taxes.

However, the high disposal gain from the disposal of the Celesio division had a positive impact on profit after taxes in 2014. Therefore profit after taxes in 2015 is expected to be significantly below the previous year’s level.

The development in profit after taxes is reflected in the value-oriented performance indicators, Haniel value added and return on capital employed in 2014. As the disposal gain from the disposal of the Celesio division was included in the 2014 Return, this return will decline significantly in 2015. This will result in a significant degradation of the value-oriented performance indicators, even though the average capital employed, and thus the cost of capital, will be lower due to the deconsolidation of Celesio.

By contrast, Haniel cash flow, which was not impacted positively in 2014 from the income from the Celesio disposal, is expected to be significantly above the previous year’s level in 2015. In contrast to 2014, METRO AG will again distribute a dividend to Haniel in the 2015 financial year, which will positively impact Haniel cash flow. In addition, the one-off expenses incurred in connection with the bond redemptions in 2014 will not be incurred in the result from financing activities, and in addition, the envisaged savings on interest payments will be realised. Both effects will positively impact Haniel cash flow.

The focus of the Haniel Holding Company’s activities will continue to lie on its search for new business divisions. Should there be a business acquisition in the coming financial year, the investments in non-current assets in 2015 would likely increase considerably over 2014. But even excluding the investments at the Holding Company level, capital expenditures are anticipated to be higher, which is attributable in particular to the planned modernisation of IT systems in the CWS-boco and TAKKT divisions.

If the search for new business divisions or supplementary acquisitions for existing divisions is successful, the changes in revenue and earnings expected for the Haniel Group will differ from the changes presented.