Page 14 - Hoftex Annual Report 2018 EN

Letter to Shareholders
Supervisory Board Report
Group Management Report -5.4% Consolidated Financial Statements Annexes
segment. Moreover, the undergarments segment experienced significant declines; sales plummeted by -18.2 %. Even the growth in the workwear (+4.0 %), hosiery (+3.4 %) and warp/weft knitting (+44.0 %) segments was unable to compensate for this decline.
10.0% 44% 100 5.0% 4.0% 3.4% 50 0.0% 0 -5.0% -50 -10.0% -100 -15.0% -18.2% -150 -20.0% -200 -25.0% -250
Fig. 5: 2018 sales trends in the apparel segment
Employment levels in the German textile and fashion industry declined slightly (-0.5 %) this year due to the economic conditions. The textile segment had 0.9 % more employees, while the apparel segment saw a -3.5 % drop in employment.
Compared to 2017 in EUR
Source: Industry association “textile+ mode”, February 2019 market report
Conversely, wage and salary levels rose by +1.3 %. The textile segment paid +2.9 % more than in the previous year, while wages in the apparel segment declined by -1.7 %.
Exports also rose during the year under review (+5.3 %). The export volume in the textile segment re- mained at the previous year’s level (-0.1 %), while the apparel segment’s exports climbed by +8.7 %.
The market environment proved to be quite challenging for the Hoftex Group overall during the 2018 fiscal year. The general weakness in the automotive industry had a ripple effect worldwide, particu- larly on the German economy. Accounting for more than half of our sales, business with the automo- tive supplier sector is also a key factor in the Hoftex Group’s performance.
Our largest division TENOWO’s 2018 sales were EUR 133.9 million, which translates into a decline of 2 % compared to the previous year’s figure of EUR 136.4 million. As a specialist for the development and production of nonwovens, TENOWO has established itself as a key partner for technical applica- tions in the automotive sector over the past few decades. However, weak growth in the US car market in particular meant that the strongest sales segment, automotive, underperformed both in terms of unit sales and sales growth. The decline in demand that began in the US in 2017 continued throughout 2018, causing the Lincolnton location to miss its sales targets. The dampening of German car production in the second half of 2018 also had a noticeable effect at some of our German
Workwear Other Outerware Underg Hosiery Others Warp/weft
Mio. EUR
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2.3. Overview of business performance