Annual Report 2009/10 Excellence in Retailing - Douglas Holding

48 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
Fig. 12 · DVA and Delta DVA by division – Fiscal year 2009/10
NOPAT
(in EUR m)
Capital employed
(in EUR m)
mainly arose from the first time full consolidation of buch.de in the fiscal year under review.
The valuation effect contained in the earnings before taxes (EBT) from buch.de in
the amount of 6.1 million EUR was eliminated in calculating the DVA.
The highest percentage value increase was realized in the Jewelry division with a
DVA increase of 1.5 million EUR to 5.6 million EUR in the reporting year. Both the positive
earnings performance and the improved working capital management enabled the
DVA to increase. With a return on capital employed (ROCE) of 11.3 percent, the Jewelry
division together with the Confectionery division were the top leaders of the DOUGLAS
Group.
The Fashion division reduced the capital employed as a result of the closure of the
fashion store in Berlin; thus, posting a slightly improved DVA over the preceding year.
Nevertheless, AppelrathCüpper reported a negative value contribution of 6.6 million EUR
for the reporting year.
The Confectionery division reached a positive DVA of 1.2 million EUR in the reporting
year; thereby exceeding the prior year’s DVA by 0.3 million EUR.
The Other Companies/Consolidation division increased the value contribution by
1.5 million EUR in the fiscal year under review. However, the absolute value contribution
of the administrative companies continued to be negative at 5.0 million EUR.
DVA as a key performance indicator of corporate control
DVA 1)
(in EUR m)
ROCE 2)
(in %)
Delta DVA
(in EUR m)
Perfumeries 76.6 836.6 33.6 10.5 7.3
Books 16.7 388.6 −5.1 5.2 −8.2
Jewelry 12.8 117.5 5.6 11.3 1.5
Fashion 0.8 113.0 −6.6 0.7 0.8
Confectionery 2.6 25.3 1.2 11.3 0.3
Sales subsidiaries 109.5 1.481.0 28.7 8.4 1.7
Other companies/consolidation −8.7 −56.0 −5.0 − 1.5
DOUGLAS Group 100.9 1.425.0 23.7 8.2 3.2
1) Adjusted for the planned start-up costs from the store-related investments. These are added to the DVA of the period,
shown in the capital employed of the subsequent period and charged to cost of capital.
2) ROCE = (NOPAT + start-up costs) / capital employed
The control factor, the DOUGLAS Value Added (DVA), was introduced in 2001 together
with the business consultants Stern Stewart. Based on the internationally recognized control
and management system, the Economic Value Added® (EVA®) concept the DVA allows
the measuring of all decision-making processes in terms of increasing the business value.
In addition to operating and strategic decisions, all investment decisions in particular
are reviewed in terms of their sustained contribution to value. In order to be certain that
this is performed in all operating units, the DVA is implemented in all internal reporting
within the Group – right down to the store level.