Annual report 2014

12 Equity

As at 31 December 2014, the subscribed capital of Franz Haniel & Cie. GmbH remained unchanged at EUR 1,000 million. All shares are fully paid-in and held either directly or indirectly by the Haniel family.

Changes in equity are shown in the statement of changes in equity.

Treasury shares with a nominal amount of EUR 1 million (previous year: EUR 0 million) were acquired during the financial year. The non-controlling interests in the equity of consolidated subsidiaries relate primarily to TAKKT AG, which is domiciled in Stuttgart. In the previous year, non-controlling interests also had an interest of EUR 1,126 million in Celesio AG, which was disposed of in the financial year.

The changes in the scope of consolidation during the financial year relate to the disposal of the Celesio division.

Haniel reduced its holding in TAKKT AG by 20.16 per cent during the previous year. Haniel received consideration in the amount of EUR 149 million for the shares in TAKKT AG sold. The transaction increased the carrying amount of the non-controlling interests by EUR 55 million. The difference between the consideration received and the carrying amount attributable to the shares sold was recognised in the equity attributable to the shareholders of Franz Haniel & Cie. GmbH. As at the reporting date, Haniel held a 50.25 per cent interest in TAKKT AG, the holding company of the TAKKT division.

The following table contains the financial information on the TAKKT division recognised in Haniel’s consolidated financial statements.

EUR million 31 Dec. 2014 31 Dec. 2013
Non-current assets 741 726
Current assets 219 203
Non-current liabilities 225 385
Current liabilities 255 119
Equity 480 425
of which attributable to non-controlling interests 174 146
EUR million 20142013
Revenue 981953
Operating profit 11196
Profit after taxes 6653
of which attributable to non-controlling interests 3320
Other comprehensive income 9-3
Comprehensive income 7550
of which attributable to non-controlling interests 3818
 
Cash flow from operating activities 10178
Cash flow from investing activities -13-9
Cash flow from financing activities -90-68
Dividends paid to non-controlling interests 106

During the previous year, the Celesio and ELG divisions acquired non-controlling interests of fully consolidated subsidiaries for a purchase price of EUR 3 million. The carrying amounts of the non-controlling interests amounted to EUR 2 million. This resulted in a EUR 1 million decrease in retained earnings attributable to the shareholders of Franz Haniel & Cie. GmbH.

The total amount of accumulated other comprehensive income changed as follows:

Enlarge table
EUR million As at
1 Jan. 2014
Changes in the scope of consolidation Changes in shares in companies already consolidated Other comprehensive income Currency translation effects As at
  31 Dec. 2014
Remeasurements of defined benefit plans -288 201 -81 1 -167
Deferred taxes 72 -49   24 47
Pro-rata other comprehensive income not to be reclassified to profit or loss from investments accounted for at equity -131 1 -100 -230
Other comprehensive income not to be reclassified to profit or loss -347 153 0 -157 1 -350
Derivative financial instruments -23 2 15 -6
Financial assets available for sale 0   0
Deferred taxes 6 -4 2
Currency translation effects -318 145   167 -1 -7
Share of other comprehensive income of investments accounted for at equity -132   -107 -239
Other comprehensive income to be reclassified to profit or loss -467 147 0 71 -1 -250
Accumulated other comprehensive income -814 300 0 -86 0 -600
of which attributable to non-controlling interests -242 223 9 -10
of which attributable to shareholders of Franz Haniel & Cie. GmbH -572 77 -95 -590
Enlarge table
EUR million As at
1 Jan. 2013
Changes in the scope of consolidation Changes in shares in companies already consolidated Other comprehensive income Currency
translation effects
As at
31 Dec. 2013
Remeasurements of defined benefit plans -293 10 -24 19 -288
Deferred taxes 81 -1   -3 -5 72
Pro-rata other comprehensive income not to be reclassified to profit or loss from investments accounted for at equity -137 6 -131
Other comprehensive income not to be reclassified to profit or loss -349 9 0 -21 14 -347
Derivative financial instruments -56 33 -23
Financial assets available for sale 21 -21 0
Deferred taxes 14 -7 -1 6
Currency translation effects -179 -126 -13 -318
Share of other comprehensive income of investments accounted for at equity -131 -1 -132
Other comprehensive income to be reclassified to profit or loss -331 0 0 -122 -14 -467
Accumulated other comprehensive income -680 9 0 -143 0 -814
of which attributable to non-controlling interests -177 5 -6 -64   -242
of which attributable to shareholders of Franz Haniel & Cie. GmbH -503 4 6 -79 -572

The accumulated other comprehensive income presented contains a total amount of EUR 2 million (previous year: EUR -446 million) that is attributable to assets and liabilities held for sale. This includes EUR 0 million (previous year: EUR -157 million) that may not be reclassified to profit or loss.

CAPITAL MANAGEMENT

The aim of the Haniel Group’s capital management is, for one, to safeguard financial flexibility, provide scope for value-enhancing investments, and maintain sound ratios in the statement of financial position. The Group seeks to achieve investment-grade credit ratings. Another aim of capital management is to ensure that the capital employed in the Haniel Group is used to increase value.

The Group manages the solidity of its balance sheet ratios by monitoring the equity ratio, gearing and interest cover ratio.

EUR million 2014 2013
Equity 3,973 4,556
/ Total assets 6,446 13,387
Equity ratio (in %) 61.6 34.0
 
(Financial liabilities, including held for sale 1,469 4,401
- Cash and cash equivalents, including held for sale) 111 558
/ Equity 3,973 4,556
Gearing 0.3 0.8
 
(Operating profit, including discontinued operations 258 593
+ Result from investments accounted for at equity, including discontinued operations 14 100
+ Other investment result, including discontinued operations) 1 30
/ (Finance costs, including discontinued operations 221 340
- Other net financial income, including discontinued operations) 8 22
Interest cover ratio 1.3 2.3

In order to manage the capital employed from yield perspectives, the Group uses the Haniel value added (HVA) and the Return on capital employed (ROCE) as value-based performance indicators. They show whether the profits generated with the capital employed cover the cost of capital.

EUR million 2014 20132012
Operating profit217166
+ Result from investments accounted for at equity 14 96
+ Other investment result 24
+ Other net financial income 9 26
- Income tax expenses 59 35
+ Profit after taxes from discontinued operations before finance costs 726 330
Return 907 607
 
Total assets 6,446 13,38714,469
- Current provisions 103 122269
- Trade payables and similar liabilities1511252,470
- Income tax liabilities 18 1269
- Other current liabilities 226 200922
- Deferred tax liabilities 51 5094
- Non-interest bearing liabilities held for sale 8 3,10374
Capital employed 5,889 9,77510,571
   
Average capital employed (current and previous year divided by two) 7,832 10,173 
x Weighted average cost of capital (in %) 8.1 8.1 
Cost of capital 634 824 
   
Return 907 607 
- Cost of capital 634 824 
Haniel value added (HVA) 273 -217 
   
Return 907 607 
/ Average capital employed 7,832 10,173 
Return on capital employed (ROCE, in %) 11.6 6.0 

The weighted average cost of capital (WACC) reflects the expected return of equity and debt providers after taxes.

In addition, investment projects are assessed using uniform DCF methods; risk-appropriate minimum rates of return are specified for each division and each strategic business unit.