HANIEL INVESTOR UPDATE CALL APRIL 7, 2014

Transcription

1 HANIEL INVESTOR UPDATE CALL APRIL 7, 2014

2 DISCLAIMER PLEASE NOTE THAT THIS PRESENTATION (INCLUDING ANY INFORMATION CONTAINED HEREIN AND ANY INFORMATION, WHETHER OR NOT IN WRITING, SUPPLIED IN CONNECTION WHEREWITH) IS FOR INSTITUTIONAL INVESTORS ONLY. THIS PRESENTATION IS FURNISHED TO YOU SOLELY FOR YOUR INFORMATION, SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Franz Haniel & Cie. GmbH (hereinafter referred to as the Company or as Haniel ), or any of its parent or subsidiary undertakings or any of such person s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. This presentation may contain forward-looking statements. In addition to statements which are forward-looking by reason of context, forward-looking statements are indicated by the use of words such as forecast, expect, intend, plan, predict, assume, believe, estimate, may, shall, anticipate or expressions with similar meanings. Forwardlooking statements are based on certain expectations and assumptions at the time of preparation of this presentation and are subject to risks and uncertainties, e.g. such relating to the future development of the economic and regulatory environment, the behavior of competitors and other market participants or the ability to successfully integrate acquired business and achieve anticipated synergies. If any of these or other risks and uncertainties occur or if the assumptions underlying any of these statements prove incorrect, actual results may differ materially from those expressed or implied by a forward-looking statement. Therefore, no representation of warranty, expressed or implied, is made regarding any forward-looking statement. Haniel neither intends nor undertakes to update forward-looking statements. Please note that data from external sources cited in this presentation has not been independently verified by Haniel. By accepting this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company s business. This Presentation speaks as of April 7 th Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This material is given in conjunction with an oral Presentation and should not be taken out of context. 2

3 VALUE GENERATION BUSINESS DEVELOPMENTS OF DIVISIONS OUTLOOK FRANZ HANIEL SUBGROUP 3

4 SITUATION ONE YEAR AGO Net financial debt Franz Haniel Subgroup Loan To Value Franz Haniel Subgroup EUR bn in % % /13 communicated target /12 03/13 LTV 3 month average Net Financial Debt reduced by about EUR 1.7bn since 2007 Loan To Value actively improved via divestment measures Current net financial debt reduced significantly below communicated target of EUR 2.1bn 4

5 PORTFOLIO VALUE* ONE YEAR AGO March 31 st 22% Celesio 43% METRO Group % 75% % TAKKT 6% ELG 15% CWS-boco 4% Others Market Value Portfolio Net Financial Debt Unlisted Assets Listed Assets Net financial debt With 75% listed assets portfolio is highly liquid 5 * 3-month average

6 HANIEL DELIVERED MORE THAN ANNOUNCED 4% of Metro 5% of Celesio Other non-core assets 20% TAKKT Xella Vendor Loan Total ~EUR 850m Measures announced Additional measures Divestment measures announced in November have been executed completely Opportunities for further divestment measures have been identified and successfully undertaken Haniel proved liquidity of its assets 6

7 PORTFOLIO VALUE AT MARKET PRICES* December 31, % Celesio 48% METRO Group 18% 7% TAKKT 82% 1.6 4% ELG 14% CWS-boco Market Value Portfolio Net Financial Debt Unlisted Assets Listed Assets Net financial debt With 82% listed assets portfolio is highly liquid 7 * 3-month average

8 CELESIO DIVESTMENT: IMPORTANT STEP TOWARDS REBALANCED PORTFOLIO Starting Position Increased competition and regulation in pharmaceutical market Celesio stand alone not perfectly positioned to deal with big pharma Deal Rationale McKesson: Opportunity to enter European market and become Global Healthcare Leader Celesio: Combination with McKesson Group offers great opportunities and considerable potential for growth Haniel: Possibility to place Celesio into hands of new long-term investor Transaction beneficial for all parties involved Sale High investment value for McKesson led to premium of c. 49 % Closed in 2014 at EUR per share amounting to net proceeds of about EUR 2.0bn Achievements Celesio together with McKesson much better positioned in competitive market Haniel now able to invest in new companies 8

9 HANIEL GENERATED LEEWAY TO ACT Net financial debt Franz Haniel Subgroup Loan To Value Franz Haniel Subgroup EUR bn -1.3 in % ~ /2014 Target Range /2014 LTV 3 month average Loan To Value actively improved into investment grade area Celesio proceeds will partly be used to further reduce net financial debt, partly to finance acquisitions in the upcoming years 9

10 PORTFOLIO VALUE AT MARKET PRICES* February 28, % TAKKT 6% ELG 64% METRO Group 27% 20% CWS-boco 73% -0.3 Market Value Portfolio Net Financial Debt Unlisted Assets Listed Assets Net financial Debt Sale of Celesio generated room for new investments 10 * 3-month average

11 TRANSFORMATION PUTS PRESSURE ON CASHFLOW 2014e Dividends received Other operating cashflow Interest Payments before one-off effects Interest Payments one off effects Cashflow from operations Dividends paid to shareholders Share buyback Divestments / Investments ,540 Cashflow related change in net financial liabilities to third parties ,330 Total Cash Cover Total Cash Cover adj. for one-off Int. Paym Transformation of financing structure towards lower debt level increased interest payments one-offs: Close out derivatives Bond buybacks Cashflow on holding level 2014 in addition hit by Metro s zero dividend for stub year 11

12 HANIEL REDUCED GROSS DEBT VIA TENDER OFFER December 31, March 31, >= >=2019 Other financial liabilities Bonds, CP and other securities Liabilities against shareholders (subordinated) Committed facilities used Very successful tender offer in February for the bonds maturing 2017 and 2018 with repurchase of nominal EUR 350m Proceeds from sale of Celesio currently held as cash, cash equivalents and financial assets to be reinvested over time 12

13 EXCELLENT LIQUIDITY SITUATION September 30, March 31, Committed facilities unused Committed facilities used Committed facilities unused Committed facilities used Haniel in excellent liquidity position with EUR 1.1bn unused committed credit facilities Successful annual roll-over of bank facilities Long-term bank facilities do not contain any financial covenants, MAC or rating-related events-of-default 13

14 RATINGS IMPROVED TO BB+/Ba1 Current Rating S&P: BB+ (stable outlook) Moody s: Ba1 (stable outlook) Target mid-term Solid investment grade rating (BBB stable outlook) Rebalancing of portfolio to improve cash ratios and diversification Key Rating Factors Strong asset and financial liquidity Actively reduced loan to value via divestment measures Active deleveraging by Franz Haniel & Cie. GmbH led to rating improvements in 14 Loan To Value after Celesio-sale currently no issue Celesio disposal laid groundwork for rebalancing of portfolio at a lower level of leverage

15 VALUE GENERATION BUSINESS DEVELOPMENTS OF DIVISIONS OUTLOOK FRANZ HANIEL SUBGROUP 15

16 PORTFOLIO AS OF 31 ST DECEMBER Sold to McKesson in 2014 Franz Haniel Subgroup CWS-boco ELG TAKKT METRO Group Celesio - Textile services - Washroom hygiene - Dust control mats - Trading and processing of raw materials for the stainless steel industry - B2B direct marketing specialist for business equipment - Self-service wholesale - Hypermarkets - Consumer electronics - Department stores - Retail pharmacies -Pharmaceutical wholesale - Co-operations with pharmacies Invested since: 1981 Business Segment: B2B Service Provider Cycle: low cyclical (late) Invested since: 1983 Business Segment: Trading Cycle: high cyclical (early) Invested since: 1985 Business Segment: B2B Cycle: cyclical Invested since: 1966 Business Segment: Retail & Wholesale Cycle: moderate-cyclical Invested since: 1962 Sold to McKesson: 2014 Business Segment: Retail & Wholesale Cycle: non-cyclical 100 % 100 % 50 % 30 % 50 % Diversified investment portfolio regarding business models geographic coverage business cyclicality 16

17 CWS-boco WITH ADVANCED FOCUS FUTURE PROGRAM Operating Profit increased significantly Focus Future repositioning project successfully continued Leasing business stable as difficult economic environment developments were offset by decreasing cancelation rates Trade business declined due to weak economy Turnover Operating profit Dividend

18 ELG PROFITABLE IN DIFFICULT MARKET ENVIRONMENT Successful expansion of activities in superalloys market segment Margins in stainless steel scrap business increased Stainless steel scrap market characterized by intense competition as demand has been weak throughout Turnover Operating profit Dividend 2, ,364 1,

19 TAKKT FACED WEAK MARKET ENVIRONMENT Revenue rose slightly, but operating profit down due to difficult economy Increased revenue due to first time full year inclusion of Ratioform and GPA, which performed good in 2014 Topdeq will be gradually discontinued by mid-2014 due to disappointing development Austerity in US negatively influenced TAKKT s business Turnover Operating result Dividend EUR special dividend ordinary dividend

20 METRO CONTINUED WITH STRATEGIC REALIGNMENT Lower impact of one-off expenses on operating income Key initiatives launched to increase added value for the customer: Expansion of supply and multi-channel activities Improving product ranges and further strengthening of own brands Portfolio measures weight down revenue Sale of Metro Cash & Carry UK in and Real s eastern European business in Turnover EUR bn Operating result Dividend EUR , ,979 1, ,113 1,094 1, * 9M Q1 /2014 Q1 / One-off effects * as reported

21 CELESIO (DISCONTINUED OPERATION) Continued strategic projects in Establishment of a European pharmacy network Operational Excellence Program resulted in additional cost savings Celesio exposed to strong rebate competition in the German wholesale market Haniel sold it s stake in Celesio to McKesson in Q1/2014 Turnover Operating result EUR bn Dividend EUR

22 OUTLOOK Economic growth expected to pick up slightly in 2014 High single-digit percentage increase in turnover and moderate operating profit growth expected CWSboco Development further depends on key internal projects aimed at efficiency enhancement Low single-digit percentage revenue growth and more than 10 % increase in EBIT expected ELG Increase of nickel price as well as demand in US expected Revenue assumed to increase by more than 10 %; slight increase in operating profit expected TAKKT Focus on integrated multi-channel approach Slight revenue growth and moderate increase in operating profit expected METRO GROUP International expansion and multi-channel sales expected to increase revenue Like-for-like and exchange rate adjusted slight increase in revenue and operating profit (before one-offs) expected 22

23 VALUE GENERATION BUSINESS DEVELOPMENTS OF DIVISIONS OUTLOOK FRANZ HANIEL SUBGROUP 23

24 HANIEL CURRENTLY IN TRANSFORMATION PHASE Deleveraging on holding level Substantial divestment measures implemented to significantly reduce net financial debt on holding level Further decreased new target level Transformation of financing structure Bond buybacks to decrease gross debt Optimisation of bank facilities regarding volume and maturities Goals for upcoming years Focus on strategic projects inside existing portfolio Acquisition of new businesses 24

25 HANIEL: FAMILY-EQUITY COMPANY SINCE 1756 Availability of equity for unlimited term short term Approach to value creation entrepreneurial "financial engineering" Expected return of providers of capital none maximum Culture long-term focus on value short-term focus on return Haniel has attractive position as investor 25

26 WHAT ARE WE LOOKING FOR Filter criteria Added value realisable Future-facing business model Contribution to the diversification of Haniel's portfolio No exchange listing Clear majority stake Positive contribution to sustainability (people/planet/profit) Cultural fit and reliable corporate governance New business models 26

27 HANIEL IS ENKELFÄHIG! Attractive positioning as investor Strong values Focus on sustainable business models Financial resources Stable balance sheet structure 27