Page 26 - Hoftex Annual Report 2018 EN

Letter to Shareholders Supervisory Board Report
Consolidated Financial Statements
Annexes
Textile manufacturing Apparel manufacturing
Assessment of business performance 20
15 Balance Business expectations 40 Balance
10 50
30
Source: ifo economic surveys for 2019
Fig. 9: Economic growth in Germany
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Assessment of business performance Business expectations
-5 -10
The preceding year’s trend continued in the first quarter of 2018. Neither the apparel nor the textile sector is developing satisfactorily at the moment. Order intake, sales and economic indicators conti- nue to show a downward trend. If consumer confidence remains weak in 2019, the weak growth we saw last year threatens to continue.
6.3. Outlook – business performance
-15 -10
0
-20
-20
2016 2017 2018 2019 2016 2017 2018 2019
Group Management Report
The current market environment and the outlook for global economic growth in 2019 also indicate sluggish or declining development in the textile and apparel industry. The future course of inter- national trade relations between the US and China will influence our sales growth just as much as the development of the automotive sector. The general economic conditions in the automotive industry will remain challenging in 2019 as well: Following the slump in demand for cars in the world’s three largest auto markets, this trend is expected to continue in 2019. In addition, efforts to engineer alter- native drive technologies and advancements in autonomous driving are the challenges of the future.
The market calming TENOWO experienced in the last quarter of 2018 is still ongoing. Under these circumstances, we now believe it will be very challenging indeed to achieve the unit sales and sales growth projected for 2019, which would essentially be facilitated by further expanding capacity utili- sation of our newly installed machine fleet. One of our strategic focuses alongside intensive, per- sonalised customer service is to concentrate our sales activities more on new business sectors and applications. We are strengthening our global sales team specifically for this purpose. Initial successes are already apparent. Nevertheless, these efforts will only have a partial effect in the short term; they should primarily be seen as medium-term measures to secure the success of our company. In addition, the acquisition of Industriale S.r.l. gives us access to new markets that we will focus on intently. In engineering and production we already began realigning and adding staff, not only to main- tain existing facilities and manage the planned replacement and expansion investments as effectively as possible, but also to achieve further gains in quality and efficiency. We still see major opportuni- ties and potential for further cost optimisation.
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NEUTEX underscored its new positioning as a modern, innovative international household textile supplier at the annual “Heimtextil” trade fair in January 2019. Response was very good and the market reception of the international sales orientation was positive. Despite all of this, NEUTEX cannot escape the market trend; the industry economy will need to recover in order for us to exceed last year’s growth as planned. The US market is quite interesting for us, and we see potential there. However, political frictions make it difficult for us to make specific growth projections. Another objective defined for 2019 is operational improvement through the optimisation of procedures, processes and logistics.