I am pleased to be able to report on another record year for Messer; a year in which we also celebrated our 120th anniversary.

In 2018, despite the politically unstable situation worldwide, we achieved double-digit growth, further improved our margin and brought our debt down to its lowest level since Messer Group GmbH was founded in 2004.

The biggest contribution to this result came from our activities in China, Vietnam and South-East Europe; the Western and Central Europe regions performed to plan with moderate growth.

In Messer’s anniversary year, our plants in China operated at full capacity with prices at a high level. In China, new air separation units are in the planning stage or under construction in Changsha, Xiangtan, Zhangjiagang, Shunde, Chongqing, Dongguan and Hengyang. Among other things, this will greatly enhance our capacity for liquefied air gases, as our existing air gas capacities were almost fully utilised in 2018. The area of specialty gases is also being expanded further with the construction of a new plant in Quanjiao.

There are similar developments in Vietnam, where our major construction site in the centre of the country is making great progress: the two air separation units which will produce 80,000 Nm³ of oxygen per hour for our customer Hoa Phat are due to go into operation by the summer of 2019. We will realign our activities in the ASEAN region and run them from Bangkok in the future. Besides Vietnam, we will concentrate on the region’s other large countries – Thailand and Malaysia – for the time being and develop new projects there.

In Serbia, our two main customers – the steelworks in Smederevo and the copper works in Bor – have been taken over by Chinese companies. Business has been stable again since then, especially with the plants’ solvency now being assured.

In Slovenia, we successfully commissioned our new air separation unit at our customer Knauf Insulation’s site in May following a very lengthy approval process.

In Hungary, we have enhanced our CO2 capacity at the Olbő facility with a third phase of expansion. We have also succeeded in expanding our on-site business with a further two nitrogen generators.

The takeover of Buse’s activities in Romania, which was completed in May 2018, will strengthen our market position in this country.

In Germany, we have started work on the construction of a hydrogen facility for Rütgers in Castrop-Rauxel and an air separation unit at the Saint-Gobain Isover site in Speyer.

We have come to an agreement with Mittal Steel about the construction of a new joint air separation unit to ensure a continued supply for the steel mill in Ostrava, Czech Republic, which has been supplied by us since 1993.

The absolute highlight of 2018 was the agreement with Linde and Praxair regarding the takeover of the American business operations that had to be sold for antitrust reasons as a result of the merger of these two competitors. In March 2019, together with financial partner CVC Capital Partners, we thus took over large parts of Linde’s activities in the USA as well as all of Linde’s subsidiaries in Canada, Brazil and Columbia. The transaction also included Praxair’s subsidiary in Chile. The deal encompasses a total of 44 air separation units, 21 CO2 plants, six hydrogen facilities, a helium source, twelve helium filling plants, a broad-based cylinder gases business in Canada and an extensive home care operation in Columbia.

We have merged the businesses acquired through this takeover with our existing activities in Western Europe – except ASCO Carbon Dioxide Ltd – and are running the merged entity as a separate subsidiary called Messer Industries GmbH, with the Messer Group holding 58 % and CVC 42 % of the capital.

This has established Messer as the largest family-run concern in its industry and as a global supplier in the world’s key markets.

Our vision is to merge the two companies – Messer Group and Messer Industries – in a few years to create a group with sales of approximately 3.2 billion euro and 11,000 employees, operating more than 120 air separation units in over 40 countries. It would then be ranked fifth worldwide among international industrial gases companies.

The process of consolidation at our sister company MEC Holding was continued in 2018.

At Castolin Eutectic Group, the restructuring process initiated in 2017 is yielding better results – aided by stronger demand for our products in 2018. We want to use this financially stronger basis to continue to achieve sustainable growth in the coming years. After experiencing difficulties with underused capacity in recent years, our service segment in particular developed successfully in 2018. A major contribution to this came from the order that Monitor Coatings received to coat the decks of two British aircraft carriers. Our activities in the steel industry, the oil industry and the boiler coating segment also produced positive results. All in all, the Castolin Eutectic Group’s development is satisfactory and makes us look optimistically into the next few years.

Messer Cutting Systems has shown determination in continuing its development into a modern digitalised company. Several global initiatives aimed at improving products, processes and market-related activities have been launched and some of them have already been implemented. For example, the new fibre laser machine has been unveiled, a modular system for standard machines developed and our service and customer service strengthened. Teamwork has been strengthened and a new, modern corporate culture created with the aid of an employee survey and the launch of a leadership development programme. On this basis – constantly in a process of development – we are building our new global strategy, which will lead to greater company successes in the coming years.

Our Spectron business unit continues to be run on a sound and robust basis. On 1 August 2018, we took over Concept Integrated Ltd., hitherto our agency in Singapore. The company has been renamed Spectron GCS Singapore Ltd. and will now also have responsibility for all the countries of the growing ASEAN region, thereby contributing to the growth of the Spectron Group. In addition, new product developments in the area of pressure regulators and pressure measuring equipment for high flow rates will have a positive influence on future business.

Unfortunately, the BIT Group has not developed as well as expected. We have reacted quickly and determinedly to the challenges facing us in order to make BIT fit for the future in its market. We remain committed to our strategy of establishing BIT as the preferred development and production partner for medical diagnostic equipment. A coaching programme carried out globally is intended to bring about a sustained improvement in corporate culture and management style by fostering courage, teamwork and an atmosphere of mutual trust. Our investments in the further expansion of our R&D capacities are also showing promising initial results. We are due to launch a number of new products in 2019. All in all, we expect an improvement in results and look to the future with confidence.

Thank you for your continued loyalty and your trust in our company.

Best wishes,