Annual Report 2009/10 Excellence in Retailing - Douglas Holding

34 Management Report
Key results
Business activities and operating environment
Net assets, financial position and result of operations
DOUGLAS HOLDING AG
Subsequent events
Control system and success factors
Opportunities and risks situation
Statutory disclosures
Forecast and overall assessment
Overall economic operating environment
Global economy once again grows robustly
The global economic recovery continued into the first half of 2010, which had commenced
already in the preceding year. According to the predictions of the Institute for
World Economy (IfW), the global economy grew substantially during this period, reaching
almost the record level of the first half of 2008. An important contribution to the economic
recovery came in particular from the emerging countries of Asia and Latin America. But
western countries also made significant contributions towards economic recovery with
high export activities and growing consumer spending. The third quarter of 2010 saw a
somewhat declined momentum in the world economic recovery, which was, among others,
due to the phasing out of economic stimulus packages and restrictions on fiscal consolidation
in some countries. All in all, the economic outlook however remains positive. In
particular, economies with strong exports will continue to profit from the Asian growth
dynamic. Overall, IfW predicts economic production to grow by about 3.7 percent in 2010,
thus nearly as much as in the years before the financial crisis.
Heterogeneous development in the euro zone
The economic recovery also accelerated in the euro zone in the first half of 2010. Particularly,
export-oriented economies like Germany profited from the recovery of world
trading. While in Germany production growth stood at 2.2 percent, the gross domestic
product excluding Germany grew by only 0.6 percent. Below average production increases
were posted by Portugal, Spain and Italy; while total production in Greece and
Ireland dropped. On the whole, economic growth slightly cooled down in the second
half of 2010. The IfW predicts an increase in the gross domestic product of 1.6 percent
for the euro zone for 2010.
Rapid economic recovery in Germany
The German economy recovered in the first nine months of 2010 seemly faster than
most of the other industrial nations as a result of exports. Germany benefited to a large extent
from the rising demand for capital goods by expanding emerging economies. But the
domestic economy developed positively, too – both private consumer spending and corporate
capital expenditure increased considerably. The sharp decline in the unemployment
figures, higher net salaries and the lower interest rates all supported this development.
Consequently, Germany recovered rather quickly from the financial crisis compared to
most of the other industrial countries. The IfW predicts a significant increase in the real
gross domestic product of 3.5 percent for 2010.
Company-specific operating environment
Positive retail trading development
According to the German Retail Association (HDE), the framework conditions for retailing
improved dramatically during the course of 2010. This was aided in particular by the
overall economic recovery, the upwards trend on the employment market and the stable
consumer mood. Between January and September, the German retailing sector was higher
by a nominal 2.1 percent and a real 1.1 percent over the same period last year. Looking