Annual report 2014

Family Equity

 

Family Equity

"Haniel has been successfully shaping
change for nearly 260 years now.
We have been able to do this
because as a family-owned company
our ideals and actions have been driven
since the very start by our ambition
to merge business acumen
with a sense of responsibility
towards future generations."
(Franz M. Haniel, Chairman of the Supervisory Board)

Family Equity

"Haniel's objective is to develop
companies over the long term.
This is why we place such great value
on a balanced portfolio: our divisions
should ideally be affected by
different, complementary cycles.
In that way, we can counter-
balance risks and ensure
stable cash flows."
(Stephan Gemkow,
Chairman of the Management Board)

Family Equity

The best
of both worlds

Family

Equity

Family Equity

The best of both worlds

Haniel is a family-owned investment company.

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Family Equity

The best of both worlds

Haniel is a family-owned investment company.

We cultivate a portfolio of cutting-edge business models and develop market leaders. If we are no longer the best owner for an investment we sell it, thus creating room for new growth – both at the company being disposed of and at Haniel itself. Our actions flow from the values held by a family-owned company that has existed for 259 years: we conduct our business in a sustainable, forward-looking and future-oriented manner. As a family-equity company, we combine the best of both worlds: the professionalism of private equity and the values of a family-owned company. It is this combination that makes Haniel „enkelfähig“!

Family Equity

StrategyPrivate equity + Values  Family-owned company

Value-driven investment strategy. Haniel invests in companies – but not in just any company. A fine-meshed investment screen guarantees that only those acquisition targets which make a good fit with Haniel make the short list.

The focus is on medium-sized companies whose sustainable and cutting-edge business models will further diversify our portfolio and with which it is possible to generate an appropriate return. We are interested in megatrends which we consider relevant to our portfolio – such as new mobility patterns, climate change or the knowledge economy. Moreover, we are looking to acquire companies which operate in regions characterised by stable and familiar legal and economic environments. This is why we are actively seeking and analysing the potential of a variety of sectors and markets. At the same time, we review offers we receive.

In keeping with the principle of the “honourable businessman” – a principle Franz Haniel lived by – we develop our investments over the long term, in the spirit of partnership and with a focus on fairness. For instance, over the past 32 years, we have developed ELG into an internationally active dealer in commodities for the stainless steel industry.

And in 2014, we parted ways with Celesio because after more than 40 years, we were no longer the best owner for it. By taking this step, we created room for new growth on both sides.

In order to optimise our ability to assume a leadership role at prospective investment targets, we look for companies which are not listed and in which we can acquire a majority interest. In line with Haniel’s objective of being “enkelfähig”, companies should already be making a positive contribution to the environment and society through their sustainable actions, or be able to do so in the future. Our brand of corporate governance aims to increase value over the long term and is the source of our economic success – which not only enables but also obliges us to create value for society as a whole.

Strategy and Values

LeadershipPrivate equity + ResponsibilityFamily-owned company

Responsible leadership. At Haniel, corporate governance is driven by the principle of separation of management and ownership. As early as in the beginning of the 20th century, the Haniel family placed responsibility for managing the Company in the hands of executives from outside the family. As such, business decisions are taken independently of familial relationships.

The Haniel Holding Company is responsible for the strategic, human resources and financial management of its divisions – above all for the wholly owned subsidiaries and majority-owned interests. It develops all the tools needed to corporate development and strategic planning. Thus, the Holding Company is not merely the force behind how the portfolio is structured. It also defines strategic objectives and selects upper-echelon executives. We prefer to refill leadership positions in-house.

All business decisions are taken in consideration of the common good. We also require this of our divisions: we help them to develop their corporate responsibility strategy and lay down individual company objectives. We help to protect our environment and use natural resources responsibly.

In addition, we support social causes – and encourage our employees to do the same by backing them up in their commitment. As corporate citizens, we are dedicated to further developing the locations in which we operate. This means that we also promote public exchange – for instance between members of the sciences, political and cultural communities – to bring about positive changes for society as a whole.

Leadership and Responsibility

ProfessionalismPrivate equity + PassionFamily-owned company

A passion for professionalism. Haniel maintains a diversified portfolio. We are constantly looking into investment opportunities in order to increase the value of our portfolio. If a proposed acquisition proves to be strategically sound and financially worthwhile, we seize the opportunity.

A sound long-term rating will help us ensure that we have access to the capital markets and thus the necessary leeway to make entrepreneurial decisions. We use our know-how to professionalise new business models within the Group. In 2012, Haniel was in debt and had considerable cluster risks in its portfolio. On top of that, share prices were falling and dividends were shrinking – leading to a host of ratings downgrades. As part of a consistent debt reduction programme, Haniel reduced its stake in the listed equity investments TAKKT, Metro and Celesio, which helped lift our rating. In 2014, we sold off our interest in the pharmaceutical wholesale company Celesio entirely. This afforded us new financial leeway.

Innovative decisions require employees with an innovative spirit. We help them to live up to their full potential. Haniel’s competency model ensures that our employees have the right qualifications as well as the necessary passion to bring about change within the Group. To us, passion is a highly valued attribute: Haniel is family-owned. Although there is a strict separation between management and ownership, the family is able to weigh in on the major strategic initiatives of the management through the Supervisory Board. The family’s emotional connection and financial ties to the Company increase the quality of Supervisory Board deliberations as well as the personal involvement in all relevant decisions – this distinguishes us from publicly owned companies.

Professionalism and Passion

TransformationPrivate equity + TraditionFamily-owned company

Transformation by tradition. Constant change is in Haniel’s DNA. We do not let market events determine our actions; rather, we aim to play an active role in shaping the markets.

Back in his day, Franz Haniel invested in new, cutting-edge business models such as steelworks, mining and shipping, thus laying the foun­da­tion for the flexible and diversified family-equity company of the present, which specialises in its core business of portfolio management.

Haniel’s portfolio is currently being restructured. We see change as an opportunity. This is why we are focusing on the trends of the future and using these as a basis from which to develop potential investment opportunities. We are constantly carrying out a methodical analysis, complemented by strategic initiatives which focus the Group’s con­cen­tra­tion on megatrends. We reflect on the consequences of our decisions and weigh the benefits of investing against the costs – including those to society. The Haniel family supports us in doing so: over the long term, it has ploughed back an average of 75 per cent of the annual profits to the Company. Our high equity ratio is the basis for our financial stability.

We are constantly striving to improve and learn. We cultivate this process through efficient knowledge management. For 20 years now, the Haniel Academy has given executives and specialists the opportunity to hone their personal and professional management skills and to live up to their full potential. At the same time, it plays a key role as a knowledge hub within the Group. This will also make it possible for us to transform ourselves in the future.

Family Equity

Letter from the chairman

Dear Sir or Madam,
... a year in which Haniel was able to create the leeway it needs in order to grow its business ... more

Highlights 2014

KEY FIGURES

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