Letter from the Management Board

Dear Ladies and Gentlemen,

In 2019, ALTANA mastered a challenging market environment and at the same time took major strides in setting the course for our long-term growth. Due to the economic headwind, we were not able to achieve our ambitious sales and earnings targets, but we once again succeeded in demonstrating ALTANA’s financial and innovative strength. In order to remain on a sustainable success path, we invested heavily in the future.

While our ACTEGA division continued on its growth path due to the good demand for coating and packaging solutions from consumer-related customer industries, the ALTANA Group’s overall sales and earnings lagged behind the strong level of the previous year. This development was driven by sluggish demand from key industrial sectors, especially the automotive industry, as well as by the general economic slowdown, especially in China. Nevertheless, the EBITDA margin remained within the long-term target range of 18 to 20 percent, despite substantial spending on research and development and digitalization.

In 2019, we continued to push forward the development of promising technologies to pave the way for future profitable growth. For instance, the up-and-coming 3D printer manufacturer dp polar, in which ALTANA has held a stake since 2017, used our material development knowhow to present a 3D printing solution that offers customers from a wide range of sectors, including the automotive, aerospace, and medical technology industries, completely new possibilities for manufacturing their products. The positive feedback from potential users at the world’s largest 3D printing tradeshow Formnext confirmed the high potential of this technology.

ALTANA’s internal startup ACTEGA Metal Print is also about to launch a promising technology on the market. The technology enables packaging to be metallized with substantially less material and considerably lower costs and production time than conventional methods. The Printed Electronics technology platform, meanwhile, succeeded in developing a technically sophisticated product portfolio for conductive inks and initiated the first customer projects following intensive research and development at the ELANTAS site in Hamburg.

In order to keep the innovation and sales pipeline well filled, ALTANA continues to make above-average investments in its research and development activities, representing 7 percent of the company’s total sales. In addition, we made a number of targeted acquisitions in 2019. We acquired the wire enamels business of Hubergroup India Private Ltd., thereby strengthening our ELANTAS division in this growth market. And with the agreed upon acquisition of the Swiss overprint varnish specialist Schmid Rhyner AG, we continue to strategically expand our ACTEGA division.

BYK-Gardner – the testing and measuring instrument specialist within the ALTANA Group – acquired, among other things, refinish color matching and formulation software and can now offer its customers a complete solution from a single source. BYK-Gardner is thus making targeted use of the market trend toward digitalization. This is one of the reasons why the ALTANA Group’s first online stores went live in 2019, not only at ACTEGA but also at BYK-Gardner.

We are also making headway in the digital transformation in many other areas of our company. Above all, we are creating an infrastructure that will enable us to be successful in the digital age. For instance, BYK is investing 15 million euros alone in an innovative high throughput screening facility in Wesel. With it, tests can be carried out with enormous speed and efficiency at the highest level of quality.

In order to facilitate future growth, we pushed ahead with the expansion of our sites and production capacities in all regions of the world in 2019. In April, a new integrated BYK site opened in Shanghai, and in June, a new ACTEGA innovation center went into operation in Grevenbroich. Currently ALTANA is significantly expanding the BYK site in Gonzales, Texas, and the ACTEGA site in Bremen, Germany. And expansion projects are also underway in Deventer in the Netherlands and Tongling in China.

In all our efforts to increase our capacities and develop our sites worldwide, we also keep a close eye on ecological aspects and, above all, the safety of our employees. As a result, we were able to significantly reduce the number of accidents in our company worldwide in the past fiscal year as well. At the same time, we succeeded in further reducing CO2 emissions. In order to continue to take responsibility for climate protection in the future, we developed an ambitious program in 2019: ALTANA will become climateneutral in its direct sphere of influence starting as early as 2025, thus achieving targets that are in line with the goals of the UN Global Compact initiative for responsible and sustainable corporate management, which we joined in 2010. We are consistently pursuing our sustainability course, having already achieved in 2017 the goal we set ourselves in 2007 of reducing CO2 emissions by 30 percent of gross value added by 2020.

These examples reflect the long-term nature of ALTANA’s activities. We are not guided by short-term trends, but instead focus on moves that will strengthen our company in the long term and thus create value for our customers, employees, owner, and society as a whole. In the magazine section of this report, you can find out more about the areas in which we are already paving the way for future success and how the long-term course of the past years is already paying off. This has been made possible by ALTANA’s financial and innovative strength and, in particular, by the people in our company, who fill our sustainable growth strategy with life.

We would like to warmly thank our employees for their contribution to the success and development of ALTANA in the 2019 fiscal year. Thanks also go to the members of the Supervisory Board for their constructive accompaniment and their trust in ALTANA’s work.

Martin Babilas
Stefan Genten
Dr. Christoph Schlünken