VIPsight - June 2015

COMPANIES

MBB: small spawns success

Provisional numbers announced by Prime Standard-listed holding company MBB SE point to an increase in first quarter turnover of some 60 million Euros, more than 8 percent up on the same period of last year. EBITDA has increased by no less than 18 percent to 6.4 million Euros. At 3.4 million Euros, however, income is slightly down on last year, the reason being a higher first quarter tax bill. The quota of shareowners’ equity of this family-run business group stands at 40% which corresponded to almost 53 million Euros at the end of 2014. Turnover this year is forecast at between240 and 250 million Euros.

MBB purchases and makes long-term investments in SMEs, and the group comprises names such as plant construction company MBB Fertigungstechnik, supplier of wood-based technological products and Polish paper mill Hanke Tissue.

BMW under fire from the shareholders

In the open floor discussion of the Bayerische MotorenWerke (BMW) AGM on May 13, many shareholders expressed concern regarding the appointment of Norbert Reithofer to chair the Supervisory Board directly from the position of company CEO. The rules of good corporate governance state that the CEO ought to wait one or, better still, two years before taking on the leadership of the controlling body. The outgoing chair of the Supervisory Board, Joachim Milberg, justified the decision citing Reithofer’s “extensive” experience, a person who in turn highlighted the ease of the shift completed earlier than expected and without difficulty. BMW acts in accordance with the law on joint-stock companies which states that a majority shareholder possessing more than a quarter of voting rights is not obliged to respect the “cooling-off” period. The three major shareholders who, together, possess almost 47% of share capital with voting rights all belong to the Quandt family. Their standpoint is , is that Reithofer ought firstly to have moved to the chair of the Supervisory Board earlier than planned. This would have cleared the field for the younger executive Harald Krüger, up to then head of production, to take over the CEO slot. On December 9, in accordance with the appointing committee (composed of chair Milberg and members Karl-Ludwig Kley and Quandt siblings Stefan and Susanne Klatten), the Supervisory Board asked Reithofer to stand for election by the shareholders to the chair of the Supervisory Board at the meeting scheduled for May 13.

E.ON lifts the wraps for a first glimpse of the planned split

E.ON has made major progress in the spin-off process. The new company that will take over the less attractive sectors of the business will be called Uniper (“Unique Performance”). The headquarters of the new power company will be located at the Düsseldorf river port and Klaus Schäfer , up to now CEO of C.ON., was selected to lead it by the Supervisory Board at its meeting on April 27. Current CEO Johannes Teyssen will remain at the head of the old E.ON group, due to move to Essen where it will focus on renewable energy, power networks and client-oriented solutions. As early as January 2012 Energy commissioner Günther Oettinger suggested to E.ON and RWE, another Essen based company, to unite in order to better tackle the new challenges in power generating. In December 2014, the group announced a radical change. Johannes Teyssen maintains that it was right to take certain decisions in good time before the AGM. In any case, the decision to split the company into two business units will only reach the company agenda in time for the June 2016 AGM. The second half of 2015 will serve to prepare the company structure. Uniper will be the umbrella company for the traditional approach to electricity in sale, prospecting and production. Considering that the reserves set aside for reducing nuclear power stations will pass to the new company, criticism is being levelled at what looks like the creation of a “bad bank” for its nuclear power stations.

Joyou: Wrong numbers

Joyou, the Chinese bathroom fittings subsidiary of faucet manufacturer Grohe, has gone bankrupt. The cause of this state of affairs was an excessive indebtedness of 300 million Euros to cover balance sheet irregularities. News of this financial earthquake affecting the Prime Standard-listed company broke at the beginning of May, and now the auditors have revoked certification of the company report and the group’s accounts for 2014. The two executives involved, Jianshe Cai and Jilin Cai, were sacked on the spot by the Supervisory Board. Germany-based Grohe holds a 72 percent stake in Joyou and is now having to face a loss that a report in Finance Magazin estimates in the region 200 million Euros.

Sixt Leasing: off to a good start

Soon after getting a stock exchange listing, Sixt Leasing AG announced that it had doubled its group revenue for this year’s first quarter. First quarter EBT is up from last year’s 3.6 million to 7.3 million Euros this year. Prime Standard-listed Sixt Leasing’s turnover is also up 25% and now stands at 165 million Euros. The new kid on the block also saw a rise in its first quarter turnover in both leasing and fleet management. Sixt Leasing AG is an offshoot of Sixt SE car hire and was set up as a self-standing listed company at the beginning of May thanks to the revenue accrued by placing 112 million Euros worth of new shares. At the moment of listing, Sixt SE assigned a further 30 million Euros of equity capital to Sixt Leasing AG.