Page 4 - Hoftex Annual Report 2018 EN

4
Supervisory Board Report
Group Management Report Consolidated Financial Statements Annexes
Dear shareholders,
The difficult economic environment made 2018 a challenging year for the Hoftex Group. Despite lower sales we were able to achieve a very satisfactory EBITDA of EUR 20.8 million.
Production growth waned in nearly every industry sector in 2018. Automotive production experienced a distinct decline due to the transition to the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) in autumn 2018. We also saw a drop in demand in our TENOWO division during the second half of 2018. For years we have steadily expanded our product portfolio by developing new business sectors. Nevertheless, the automotive industry remains our most important customer sector. Consequently, we failed to meet our sales growth projections for this industry. Similarly, both the HOFTEX and NEUTEX divisions were unable to avoid the effects of overall market developments in the textile and apparel segments, where sales dropped by -1.8 %, and were compelled to revise down revenues.
The acquisition of an Italian nonwoven manufacturer in September 2018 and the sale of our share in Indian nonwoven producer Supreme Nonwoven Industries Pvt. Ltd. in September 2018 enabled us to reposition our portfolio in the TENOWO division and take an important step in developing our com- pany’s strategic direction going forward.
Letter to Shareholders
We are also making further investments in securing and expanding our own production capacities and technologies in our various locations. We spent more than EUR 12 million in total on long-term financial and tangible fixed assets. We will continue to invest this year to ensure and further streng- then our performance capability in the future and push ahead with new technologies and markets.
In light of operating development in 2018, the Management Board and the Supervisory Board of the Annual General Meeting will recommend payment of a dividend of EUR 0.25 per share. This represents an increase of 14 % compared to the previous year. We consider this payment to be appropriate and financially viable. We do hope, dear shareholders, that you will continue to accompany us on our journey and would like to express our gratitude for your confidence in us during the fiscal year just ended.
Letter to Shareholders
The difficult and unpredictable macroeconomic environment will make 2019 a year full of challenges. We believe the Hoftex Group’s strategic direction positions us well for the future and see our flexible organisation as a medium-sized enterprise as a strength that enables us to effectively respond to changing market conditions.
We would like to take this opportunity to thank the nearly 1,200 employees around the world for their commitment and dedication. It was a year shaped by numerous political and economic uncertainties. However, our work together as a team enabled us to further improve earnings and set a strategic course for the future.
Hof, 29 March 2019
Klaus Steger Robert Seibold Chairman of the Management Board CFO