Higher operating profit in all divisions

In addition to the economic environment, continuing efforts to implement strategic initiatives by the divisions are expected to have a positive effect on the Haniel Group’s business development in 2016.

For the Bekaert Textiles division it is projected that it will generate revenue of around EUR 250 million for the 2016 financial year – adjusted for business combinations and disposals as well as currency translation effects. This significant increase is attributable on the one hand to the first-time inclusion of the division in the Haniel Group over an entire year. On the other hand, the continued increase in market share on the company’s primary markets and the successful expansion of business with mattress covers in North America and higher sales of knitted fabrics are expected to affect revenue positively. The operating profit is expected to track the revenue trend and amount to approximately EUR 30 million. It should be taken into account that this operating profit is weighed down by the scheduled amortisation arising from the purchase price allocation amounting to EUR 9 million in financial year 2016.

At CWS-boco, revenue growth adjusted for acquisitions and currency translation effects is expected to grow by a low single-digit percentage in 2016. This increase is attributable mainly to the expansion of the sales force. The higher costs for investments in the future, such as the expansion of the sales force, new services and innovations which are expected to have a positive effect on revenue in the future, will still weigh down profits in 2016 and only in subsequent years will this result in a positive contribution to earnings. It can nevertheless be assumed that in financial year 2016 CWS-boco’s operating profit will improve slightly year on year. Additional measures to modernise the international laundry network and the systematic optimization of the operations will contribute to that increase.

The ELG division expects the market environment to remain difficult in 2016 in terms of the relevant commodity prices and demand. Based on the assumption of global stainless steel production at the same level as in the previous year, ELG expects its own output tonnage to increase in the single-digit percentage range. ELG expects its superalloys trade business to stabilise in 2016 and demand for superalloys toll processing to remain high. Thus, an increase in output tonnage for superalloys is expected in the low double-digit percentage range. ELG expects the price of nickel, a key commodity for its business, to remain at the low level recorded at the end of 2015. This will result, on average, in a lower price in 2016 than in 2015, when the price of nickel was USD 11,800 per day on average. Based on these assumptions, ELG expects revenue – adjusted for business acquisitions and disposals and currency translation effects – to decrease slightly. By contrast, ELG’s operating profit is expected to increase and be positive again. This forecasted improvement in earnings as compared to 2015 is expected to result from the absence of one-offs as well as to the absence of losses in value of inventory items in particular. This effect results from a continuous drop in prices for commodities and significantly weighed down ELG’s operating profit in 2015. As development on the commodity markets is very volatile, ELG’s revenue and operating profit may also deviate significantly from this forecast, however.

Adjusted for business acquisitions and disposals and for currency translation effects, the TAKKT division expects revenue to increase in the single-digit percentage range. In addition to a stable economic environment in the US and Europe, TAKKT primarily expects its sound business development to continue in the high-growth American business models. Operating profit is expected to increase moderately. In 2016, the systematic implementation of the growth initiatives launched as part of the DYNAMIC programme will continue. Among other things, the various sales and marketing channels will be better coordinated with each other in order to further improve the sales approach. Moreover, TAKKT intends to begin developing and implementing its digital agenda. The purpose of the digital agenda is to identify additional untapped potential to digitalise the business model and the business opportunities arising from that.