Annual Report 2011 the Work of Art Depicted in This Business Report, Entitled “Aufschwung” (Upswing), Is by the Circle of Artists Known As “Inges Idee” from Berlin
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Annual Report 2011 The work of art depicted in this business report, entitled “Aufschwung” (Upswing), is by the circle of artists known as “Inges Idee” from Berlin. Photographer: Gregor Ruster, Munich. Foreword 5 Shareholder Structure of the LHI Group 6 Strategy and Positioning 8 LHI Leasing GmbH’s Company History 11 Human Resources 13 LHI’s Code of Ethics 14 LHI Data 16 Key Figures 17 Business Development Report 19 Overall economic development 19 Developments in the leasing industry 20 Development of the business – asset, financial and income situation 21 Risk report 22 Outlook 24 Annual Financial Statements on 31 December 2011 26 Balance sheet 26 Statement of income 28 Notes 29 Schedule of fixed assets 29 Information on liabilities on 31.12.2011 29 I. General information on the annual financial statements 30 II. Explanations of the annual financial statements 32 III. Other information 36 IV. Appropriation of results 37 Auditor’s certificate 38 4 Foreword Dear Reader New ways of thinking. We are continually increasing our skills in the field of renewable energy sources. LHI has in the An eventful 2011 lies behind us. But in spite of sovereign meantime almost 150 MW of installed solar power stations debt crisis and uncertainties on the financial markets, LHI is connected to the network. Our ambition is to continuously able to look back on a successful year. develop new products and models. The product novelty of the year in 2011 was the co-investment. Here, product charac- All the funds we issued in 2011 were fully placed. With an teristics similar to leasing are combined with a fund concept. equity capital of EUR 60.5 million, we have achieved a size This model has clear advantages for both real estate users that gives us confidence in ourselves. and investors. This concept secures the user of the real estate access to the asset and the investor a share in a long-term LHI’s volume of new business increased by approximately and stable cash flow including a hedge against inflation. EUR 60 million to roughly EUR 1.3 billion. This continuous growth makes us particularly proud because the sovereign Continue to expand strengths. But we have also expanded debt crisis has made refinancing leasing and fund projects in other areas of the company. We were able to successfully more difficult for market participants and even spelt the end increase the portfolio of properties that we manage as corpo- for several major players in the financing business. rate service provider. In 2011, we placed an additional focus on broadening our skill in asset management. We have con- Farsightedness with caution. The fact that LHI was able siderably increased our number of personnel in this area. to begin 2012 successfully in spite of the difficult business Because lasting success can only be achieved when know- environment is due to our caution in conceiving investment how in developing models is combined with asset know-how. products. As a consequence of the rapid increase in inter- est rates right through into the second quarter of 2011, we Since a critical eye is indispensible in improving perfor- were restrained in purchasing properties in the first half of mance, we have also directed this critical eye on ourselves 2011. Asset acquisition prices and investors’ expectations in an internal project. LHI has examined its business model of attractive distributions were frequently incompatible. We together with a well-known consultancy company. The result were therefore cautious in purchasing properties and did is extremely gratifying – both for ourselves and for everyone not even issue various investment offers. This cautious pol- who works together with us: LHI is fit for the future in every icy proved to be absolutely correct. Because in the fourth respect and we will continue to be successful through con- quarter of 2011 we were able to profit from the turbulences sistent improvement in specific aspects. caused by the sovereign debt crisis and to acquire four attractive properties with stable values in order to prepare Good products as well as the performance and future orien- them for placement in 2012: the Technical University in tation of our business model allow us to look to the future with Berlin with a 20-year rental agreement, the Aircraft Turbine confidence in all areas. Fund III, the Shopping Centre in Erding and the Solar Park Germany VII. We thank our business associates and customers for their trust and their willingness to work together with us as partners, as well as our employees for their performance. Both form the basis of LHI’s success and its ability to face the future for our goal – Quality for Your Success! Oliver Porr Robert Soethe Heimo Koch Managing Director Managing Director Managing Director 5 Shareholder Structure of the LHI Group Shareholder summit LBBW NORD/LB Interim holding companies and share- LBBW Nord-Ostdeutsche holder LHI Leasing GmbH Bankbet. GmbH LHI LHI Leasing GmbH (FDI*), Pullach Interim Corporate LHI Real Estate Management GmbH holding LHI LHI TIMASO services and companies Beteiligungsverwaltung Leasing und Beteiligungs Verwaltung foreign LHI Versicherungsmakler GmbH within LHI GmbH GmbH GmbH companies LHI sp. z o.o. (Polen) LHI Management Luxemburg S.A. ALINUS Bayerische Immobilien- Movesta LHI Fondsverwaltung GmbH Beteiligungs leasing GmbH & Co. Lease and Finance GmbH Verwaltungs-KG GmbH Properties financed Various LHI Various Südleasing Various BIL Various Movesta portfolio companies portfolio companies portfolio companies portfolio companies * financial services institute 6 Shareholder summit LBBW NORD/LB Interim holding companies and share- LBBW Nord-Ostdeutsche holder LHI Leasing GmbH Bankbet. GmbH LHI LHI Leasing GmbH (FDI*), Pullach Interim Corporate LHI Real Estate Management GmbH holding LHI LHI TIMASO services and companies Beteiligungsverwaltung Leasing und Beteiligungs Verwaltung foreign LHI Versicherungsmakler GmbH within LHI GmbH GmbH GmbH companies LHI sp. z o.o. (Polen) LHI Management Luxemburg S.A. ALINUS Bayerische Immobilien- Movesta LHI Fondsverwaltung GmbH Beteiligungs leasing GmbH & Co. Lease and Finance GmbH Verwaltungs-KG GmbH Properties financed Various LHI Various Südleasing Various BIL Various Movesta portfolio companies portfolio companies portfolio companies portfolio companies 7 Strategy and Positioning When LHI Leasinggesellschaft für Handel und Industrie mbH Quite apart from leasing solutions, we also make our was established in 1973, the company’s core business was administrative skills available to the holders of real estate real estate leasing. In the years that followed, LHI had devel- portfolios. As a corporate services provider, we administer oped to become one of the most important providers in the special-purpose companies with a high degree of quality market. As evidenced by market data issued by BDL (Federal and efficiency and, if desired, can also take over the asset Association of German Leasing Companies e. V.), the total management of the properties. The additional management size of the real estate leasing market has declined consider- of real estate leasing and fund portfolios will continue to ably in the last few years. This contraction of the market led represent an important part of our business model. to a consolidation process in which LHI played a crucial role. Thus, Bayerische Immobilien Leasing was integrated into the At the beginning of the 1980’s, it was possible to generate company in 2002 and the real estate portfolio of SüdLeasing advantages by involving private persons in project financing. in 2006. In 2009, LHI’s systems took over the management This gave rise initially to LHI’s private placement business. activities of Movesta Lease and Finance GmbH. The portfolio The main driving force in the field of publicly-offered funds was fully integrated into LHI in 2011. Together with the with- was the special depreciation of investment projects in the for- drawal of traditional competitors from the real estate leasing mer GDR following the reunification of Germany. This market, LHI was able to increase its market share steadily. showed that private investors have a lasting interest in partic- Our observation is that the market size has now bottomed ipating in economically necessary investments by way of a out. Although the traditional advantages of real estate leasing fund. Strategically, we will continue to expand the fund busi- in terms of trade tax and off-balance sheet financing in terms ness sector. Our thinking here is dominated by the fact that, of commercial law no longer exist, there are still very good in future, not the structuring service as such will show a reasons for choosing real estate leasing as a way of financing return, but rather the asset management services that have investments: we are thinking here of measures to optimise to be provided. LHI has therefore made a conscious decision and anticipate real estate acquisition tax in cases of foresee- not to get involved in every imaginable class of investment, able changes in groups, outsourced property management but to concentrate on the core skill of real estate, on solar and the raising of finance through a company specialised in and wind energy in the field of renewable energy sources, this field. Strategically, therefore, LHI will not give up its activ- and on the aviation sector. In the aviation sector, we have ities in the real estate leasing business but use the strengths developed an interesting position in the market with the niche it has accumulated in order to continue to actively acquire new product aircraft turbine engines. In future, we will use this business in this market. know-how in the field of aviation and airlines to expand into the business of financing whole aircrafts as well. Our existing network with companies operating in this sector will help us in this endeavour. In the field of renewable energy, we see untapped potential in wind energy.