lion). Adjusted for negative effects from exchange-rate fluctuations,
sales rose by 6 % in operating terms. In the course of
the year, the growth dynamic developed quite positively
within the division, on the one hand due to a higher sales volume,
and on the other due to the improved product mix
compared to the previous year, supported by a slightly positive
effect from price increases that were implemented.
In the important application fields ACTEGA achieved a
positive business performance. It significantly boosted
some activities with functional products for food packaging.
But sales decreased in business with magazines and printed
supplements as well as with labels.
In 2018, the regional sales structure of the ACTEGA
division
shifted slightly in favor of Europe at the expense of
the Americas. The development in the core regions was
generally positive with the exception of the German sales
market. In operating terms sales in Europe, the division’s
largest region, increased significantly in the year under review.
In Europe, positive sales impetus came from Italy,
Spain, France, and many Eastern European countries, which
more than compensated for the slightly lower sales in
Germany.
In the Americas, sales rose in the U.S. and in Brazil,
the division’s two largest single markets in the region in
operating
terms, vis-à-vis the previous year. The division also
upped its sales in Asia in 2018.
Earnings Situation
The company’s operating sales growth is not reflected by the
earnings situation, because the price increases that were
implemented did not completely offset the strongly rising material
costs in the course of the year. As a result, earnings
before interest, taxes, depreciation and amortization (EBITDA)
decreased vis-à-vis the strong previous year by 8 %, or
€ 39.4 million, to € 430.6 million (2017: € 470.0 million).
Since the positive acquisition effects and the negative
exchange-rate effects completely balanced each other out
in the earnings, sales also fell by 8 % in operating terms after
adjustments. Nevertheless, the EBITDA margin in 2018 of
18.7 % (previous year: 20.9 %) is within our strategic target
range of 18 % to 20 %.
Both the performance of the absolute EBITDA and the
EBITDA margin were below our expectations. At the beginning
of 2018, we had expected an earnings growth on a par
with the level of sales growth and thus profitability oriented
more closely to the upper edge of our strategic target
range. The discrepancy to the forecast was primarily due to
the unexpectedly high increase in material costs.
This important cost factor for ALTANA, which encompasses
raw-materials and packaging costs, developed negatively
in relative terms. The material usage ratio, the ratio
of these costs to sales, increased substantially to 43.8 % in
2018 (previous year: 41.5 %). The main reasons were
the steady increase in raw-materials prices in the course of
the year, especially the price of oil-based raw materials
and specialty products, as well as in part extreme scarcities
and limited availabilities of important raw materials. This
trend particularly burdened BYK, ELANTAS, and ACTEGA.
Other cost factors important for ALTANA’s earnings
largely developed in proportion to sales. Personnel expenses
rose only slightly, by 1 %. The ratio of total personnel
expenses to sales fell to 20.9 % (previous year: 21.3 %).
In 2018, the structure of functional costs did not
change significantly compared to 2017. Within production
costs, external services rose disproportionately due to a
number of strategic projects, as did maintenance costs due
to high capacity utilization. In this area, personnel costs
also rose disproportionately. But other kinds of costs that are
important in production displayed a stable development
or a downward trend.
In 2018, selling and distribution expenses increased
slightly over the previous year, but the relative ratio to sales
decreased. The drivers were lower depreciation and amor58
Business Development