Dear Ladies and Gentlemen,
Management Board
For the ALTANA Group, 2018 showed different dynamics in the course of the year. In the
first half of the year, we were able to pick up on the momentum of the strong year 2017
and continue our dynamic growth, which was accompanied by an appealing margin
development despite rising raw-materials prices. In the second half of the year, however,
the demand became palpably more subdued, primarily due to the significant slow-
down of the economy in important markets for us, including the automotive industry,
the Middle East, and China. At the same time, we were confronted with substan-
tially growing margin pressure due to the acceleration of raw-materials price increases.
Nevertheless, in 2018 we achieved our growth and sales targets in our divisions and
thus for ALTANA as a whole, and we did so although our business environment became
more and more challenging in the course of the year. However, our earnings in 2018
lagged behind our strong earnings in the previous year due to declining contribution margins.
The EBITDA margin reached our long-term target range of 18 to 20 percent.
Our outlook for 2019 is influenced by a macroeconomic environment characterized by
ongoing uncertainty. The geopolitical framework conditions and trade disputes have
dampened consumption and investment expectations in many countries. In this environment,
ALTANA must set the right priorities in order to remain on the path to sustain-
able profitable growth even in troubled waters. A look back at 2018 strengthens our conviction
that by striking a balance between cost discipline and meaningful investments
in our future we can take the right path. Among other things, we made high-level investments
in property, plant and equipment by expanding our capacities in the additives
segment in Gonzales, USA, and in Shanghai, China. In the period under review, we also
made substantial investments that decisively enabled the Israeli company Landa Digital
Printing to take further steps on the way to marketing its innovative and revolutionary
printing solutions. With our participation in Velox, another startup in the digital printing
sector, we also essentially strengthened our network in the field of promising technologies.
Moreover, we significantly stepped up expenditure for research and development
once again and are making consistent progress in the digitalization of the ALTANA Group.