Page 14 - Annual Report 2019

Supervisory Board Report
Group Management Report
Consolidated Financial Statements
Annexes

HOFTEX Division
The HOFTEX division’s sales decreased by 10% to EUR 20.5 million in 2019 (prior year: EUR 22.7
million). Sales declined both in the spinning and doubling segment and in the dyeing segment.
Over the years the dyeing plant’s spectrum of of services has seen a shift towards contract dyeing.
Thus, the plant was able to maintain the same sales volumes and capacity utilisation rates as the
previous year despite sluggish sales. In a market still shaped by intense competitive pressure
from Turkey and Asia, the dyeing plant was able to defend its market share as a reliable partner
for German and European customers in the apparel and automotive supplier sector. The production
location in Selbitz is a modern, efficient and resource-friendly dyeing operation that is able to
respond quickly and flexibly to individual customer wishes thanks to its specialised equipment
and qualified personnel. Investments made in recent years facilitated these developments. Once
again in 2019 they focused on optimisations and increases in production flexibility.

Moreover, HOFTEX division sales were impacted by the loss of the spinning and doubling segment.
On 18 June 2019 Hoftex GmbH signed an agreement on the sale of the spinning mill in Drebach,
Hoftex CoreTech GmbH, to Filidea S.r.l., Biella/Italy. Following conclusion of the transaction all
participating interests and all non-current and current assets were transferred to Filidea effective
31 August 2019. Land and buildings remain the property of Hoftex GmbH. Filidea S.r.l., a joint venture
between Italian Marchi & Fildi SpA and Turkish Abalıoğlu Holding A.Ş, has been a HOFTEX business
partner for years and produces and sells yarns and threads for a wide range of applications including
safety apparel, furniture manufacturing and circular and flat knitting. The sale has no effect on other
activities in the HOFTEX division or in the TENOWO and NEUTEX divisions. The sale has no material
impact on the balance sheet.

The HOFTEX division also failed to meet earnings targets in 2019. The sale of the Drebach location
marks a retreat from traditional spinning mill production for the Hoftex Group, which was no longer
able to deliver positive earnings contributions within the Group, and a continued strategic focus on
developing and producing nonwovens.

Other
Business in both of the real estate companies developed according to plan. External leasing
revenues remained constant at the previous year’s level of EUR 2.2 million thanks to the stable
leasing situation. TENOWO is a key anchor tenant at the Moschendorf location and expanded its
production footprint by installing additional machines and equipment. A number of technical and
construction-related measures were performed in the process. The results of operations remained
consistent for the most part during the fiscal year.

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