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Westfalen Group back on the road to success

Westfalen Group headquarters on Industrieweg in Münster.

Westfalen truck wash in Kerpen: The three-lane wash has a program suitable for any vehicle type and any level of cleaning.

Westfalen is building a hydrogen fuelling station in collaboration with the Clean Energy Partnership (CEP).

It is envisaged that the hydrogen fuel service station at the Westfalen station in Münster-Amelsbüren will be completed at the end of 2016.

Münster. Following the previous year's disappointing results, the 2015 financial year has been significantly more positive for the Westfalen Group. Group earnings before tax (EBT) rose a massive 30.5 million euro from 1.5 million to 32.0 million euro. The increase in earnings has come from the divisions' higher operating profits in 2015. In the previous year the energy supply and service station divisions' earnings were significantly affected by the drop in price of mineral oil products. In the 2015 financial year group turnover dropped by 129.8 million to 1.65 billion euro or 7.3 percent lower than the previous year (1.78 billion euro). Turnover was reduced in the energy supply and service station divisions by the decrease in pricing levels for liquefied gas and motor fuel. "With our brand strength, high-quality service and personal commitment, we were able to significantly increase our margins", stressed CEO Wolfgang Fritsch-Albert.

Gases division on the up
In the reporting year the gases division was able to improve turnover and earnings and slightly exceed expectations. The improvement in earnings compared to the previous year is due to higher sales and positive margin trends - in particular with speciality gases and liquid industrial gases. The patent application for a new welding technology process for rapid prototyping with MAG processes and an argon liquid cooling system saves on raw materials, reduces production times and demonstrates the innovative strength of the Westfalen Group. During the reporting year the Westfalen Group expanded their medical product portfolio with in-house production of the medical gas carbon dioxide under the brand name Corpadur®. In May 2015 Westfalen acquired 80 percent of shares in Medica-Technik GmbH. Medica-Technik, based in Brachbach in Siegerland, specialises in homecare, medical and rehab technology. Now that it has a strengthened capital base, Medica-Technik's growth strategy should be to concentrate on the new Germany-wide profitable business of products and services for long-term oxygen therapy.

The development of our foreign subsidiaries varied greatly. The subsidiaries in Belgium and Switzerland in particular fared better than planned. In comparison, the Austrian and French subsidiaries were unable to match their expected earnings.

Significant improvement in earnings for the energy supply division
In the previous year the major drop in prices for mineral oil products had led to serious pressure on profits within goods valuation in the energy supply division.
In 2015 sales volumes increased slightly in comparison to the previous year, but combustible gas sales fell short of expectations once again due to high average temperatures at the end of the year. The sales revenues for liquefied gas were significantly lower than the previous year due to the low price level. Both the increase in natural gas and electricity supply contracts to around 13,800 (previous year around 10,000) and the sales of the Conneo propellant gas bottles, introduced the previous year, were encouraging.

Service stations develop well
Fuel sales increased nicely in the service station division but, because of low prices, turnover actually went down considerably. However, earnings were up on last year and up on plan, thanks to stable margins, an increase in diesel fuel sales and the sustained positive trend in the wash, shop and bistro business.

In the previous year the service station in Münster-Amelsbüren won the service station industry's innovation award for the service station concept. It was, in particular, the fact that it was the first service station shop and food drive-through counter in Germany that won the award. The card acceptance agreement between AVIA Mineralöl-AG, Munich and Westfalen AG means that since the start of 2016 the Westfalen Service Card has been accepted at around 800 AVIA service stations. This means that, with 5,500 stations, the Westfalen Service Card is the most accepted fuel card in Germany.

Forward-looking personnel growth
On 31 December 2015 the Westfalen Group employed 1,670 employees across Europe, a total of 246 or 17.3 percent more than the year before. The main reason for this sharp increase in personnel was the majority stake in Medica-Technik GmbH. According to a survey carried out by Focus Spezial [weekly German news magazine] and employer ranking platform kununu, the Westfalen Group is one of the best employers in Germany for the fourth year running.


Major investments
The Westfalen Group invested 46.5 million euro into the group during the 2015 financial year (previous year 51.0 million euro). In the gases division big investments were made in gaining the majority stake in Medica-Technik GmbH, in expanding the international gas business and on expansion, rationalisation and restructuring measures.

"We have also invested in the expansion of our service station network. A few days ago in Kerpen, after only six months of construction, we opened the first high-performance lorry wash under the name of Westfalen Truck Wash", explained Westfalen Chief Sales Officer Reiner Ropohl. A few months ago another Westfalen service station was opened in Cologne-Lövenich, Rhineland. "We are particularly proud of our flagship station in Münster-Amelsbüren. It is the only service station in Germany with a drive-through counter for the shop and food." But that's not all. Münster-Amelsbüren sends out an important message about alternative energies. "We currently have here the first hydrogen fuelling station for refuelling electric vehicles powered by fuel cell technology", Ropohl further explained.

Outlook
In the gases division Westfalen anticipates that increased sales and higher turnover will result in a modest improvement in earnings.

In the energy supply division there is the expectation that, compared to 2015, 2016 will have a colder average annual temperature and that this will result in an increase in sales and turnover for Westfalengas. In 2015 the German Liquefied Gas Association (DVFG) investigated the possibility of using liquefied gas for air pollution control. The studies they conducted demonstrated the significant contribution liquefied gas can make in the fight against air pollution.

Westfalen also wants to emerge in future as a stronger full-service provider to customers and use synergies on a range of cross-segment products. Westfalen also expects an additional increase in natural gas and electricity contracts and additional marketing success with Conneo propellant gas bottles and the new barbecue gas bottle, Grillmeister.

For the service station division, earnings development depends very much on changes in margins on fuel. The high price volatility on mineral oil products and competitive pressure make it difficult to forecast earnings. Compared to the levels for the previous year, planned sales and turnover are reserved.