Ladies and gentlemen, as chairman of the supervisory board, I herewith open this year's annual general meeting of Evonik Industries AG. Pursuant to Article 19 of the Articles of Association of this company, I will chair this meeting. On behalf of the members of the supervisory board and the executive board, I would like to welcome our shareholders, our shareholder proxies, the press, and our guests. A very warm welcome to everyone to our annual general meeting. My greetings also go to the Notary Public Dr. Bigemann, who will notarize today's annual general meeting. Dr. Bigemann is seated next to me to your left. He is supported by Notary Public Dr. Galla, who's seated at the speaker's registration desk to your right at the rostrum where I am seated.
Dr. Galla will be responsible for writing down the explanations and full wording to the minutes taken by the notary public and pass it on to the notary public taking the minutes, Dr. Bigemann. The members of the supervisory board and the executive board are here in full. A greeting goes to our honorary member, Mr. Müller. He will follow us on the internet live stream. Ladies and gentlemen, let's proceed with the formalities. I ascertained that this year's annual general meeting was duly called and fulfills all related publication and reporting obligations. Records relating to the publication of the convening on the 10th of April 2019 in the German Federal Gazette are available for your inspection at the speaker's registration desk and will be annexed to the minutes of the notary public. No counter motions to be published or nominations were received.
A leaflet with detailed information on the organization of proceedings and the voting procedure was handed out to you during accreditation. It is also available at the information desk in the lobby and at the back of this hall at the desk named "HV Unterlagen." Both desks can provide you with a financial report and a copy of the invitation to this year's annual general meeting with the agenda on request. Please take good note of the information provided in the leaflet. The voting procedure will be explained shortly before the voting takes place. Please keep your attendance cards with you, which you received during accreditation, until the close of this annual general meeting.
If you wish to leave the AGM before it's closed and do not wish to name a proxy, please hand back all attendance cards which you received before leaving the attendance area to our staff at the desks next to the exit. Please also hand back all attendance cards which you received if you wish to leave the annual general meeting temporarily. This is necessary for us to continuously update the attendance figures for correct voting. The attendance area includes the part of the marquee which you passed after the registration desk where you were accredited. It also includes all adjacent halls of the Grugahalle that shareholders have free access to. In particular, this hall where I am seated, the lobby, and the adjacent rooms freely accessible to the shareholders.
Before leaving the AGM, you also have the option of authorizing another participant to step in for you during the AGM. Please use the proxy form, which is part of the Präsenzkarten und Vollmachten document with the numbers 005. Shareholder proxies of the company are available, too. Authorizing the shareholder proxies of the company is possible until the end of the debate of all agenda items. In this case, please use the respective proxy form with the numbers 003 and 004 in your Präsenzkarten und Vollmachten document and hand over the entire document, Präsenzkarten und Vollmachten, with the respective instructions as part of the respective form to our staff at the exit desks.
The shareholder proxies of the company will exercise your right to vote only insofar as you've given precise instructions. Instructions on resolution proposals of the management are possible, which were published before the AGM by the company, and on resolution proposals by shareholders, which were entered as counter motions or nominations before the annual general meeting. The shareholder proxies will not accept instructions on any other shareholder rights, such as asking questions or filing motions. If you wish to do so, you would have to authorize another person. All agenda items will be addressed in a single general debate. With this form of debate, every speaker has the opportunity to speak on all items of the agenda and ask questions. A debate on any procedure motions can be done in the framework of the general debate, if no early debate is required for extraordinary reasons.
To ensure that the AGM runs properly and efficiently, I'd kindly ask all speakers to focus their statements on the items of the agenda, to keep it short, and to conclude their statements in the appropriate amount of time. If necessary, and in the best interest of all shareholders and proxies present, I will restrict the time for statements and questions. I also reserve the right to close the speakers list and the general debate ahead of time to ensure the close of the annual general meeting in an appropriate amount of time. Those shareholders or proxies who would like to take the floor are asked to register with their name and attendance card at the speakers registration desk to your right. Please use the form available at the speakers registration desk.
In the interest of a swift and coordinated proceeding, I'd ask you to register you wish to take the floor as early as possible, starting now. If you wish to file a motion or submitted nomination, I would like to ask you to register in writing at the speakers registration desk or take it to the minutes. This will allow me to take a decision on whether to give you preference in taking the floor. For your contributions and questions, please use the speakers desks to the right and the left of the rostrum. I will call up all shareholders and shareholder proxies who've requested the floor ahead of their time to speak. Please note, all statements and questions must be done in German.
The first part of the Annual General Meeting until the end of the report of Mr. Kullmann on the annual financial statement and on the management report will be broadcast live on the internet and will be available there later for download. Apart from that, there are no more audio and video recordings of the AGM by the management. The Executive Board will be supported for question and answers by stenographers. The stenographers will use temporary audio recordings to support their work, which is subsequently deleted. I would like to ask you to refrain from making video audio recordings of the AGM. In the interest of an undisturbed proceedings of this AGM, I would kindly ask you to refrain from using mobile phones here in the hall. Let me point out that smoking is only permitted in the designated areas of the lobby.
We will now proceed with the agenda. Item one of the agenda: reports to the Annual General Meeting pursuant to Section 176, Paragraph 1, Sentence 1 of the Stock Corporation Act. This includes the adopted annual financial statement of Evonik Industries AG as of December 31, 2018, the approved consolidated annual financial statement as of December 31, 2018, the summarized management report and consolidated management report of the Evonik Group and Evonik Industries AG, including the explanatory report of the Executive Board on disclosures pursuant to Sections 289a, Paragraph 1 and 315a, Paragraph 1 of the German Commercial Code. The report of the Supervisory Board of Evonik Industries AG and the proposal of the Executive Board of Evonik Industries AG for the appropriation of distributable profit.
The consolidated annual financial statement with the unqualified audit opinion by the auditor can be found in the financial report 2018 from page 93 onwards. The summarized management report from page nine and the report of the Supervisory Board from page 63 onwards. All aforementioned documents are available at the information desk in the lobby and at the desk at the back of this hall entitled. Since convening this AGM, all these documents have been available on the internet page of Evonik Industries AG and in the offices of the company for your inspection. Copies of the aforementioned documents are available at the speaker's registration desk.
The Supervisory Board examined the annual financial statement and the summarized management report of Evonik Industries AG and the Group, and the consolidated annual financial statement and approved it in its meeting on March 4, 2019, as a result of which the annual financial statement was adopted. In this meeting, the Supervisory Board examined the proposal of the Executive Board on the appropriation of the distributable profit and went along. In this meeting, the Supervisory Board also reviewed the Executive Board's report on the relation with affiliated companies in fiscal 2018, which had been audited by the auditor and was given an unqualified audit opinion. The Supervisory Board has no objections to the report and the result of the auditing by the auditors. As mentioned before, the report of the Supervisory Board can be seen in the financial report from page 63 onwards.
The activities of the supervisory board are described there in detail. I would only like to say the following. In the past fiscal year, the supervisory board performed all its duties in accordance with the law and the articles of association with great care. The supervisory board continuously and conscientiously supervised the executive board and advised and supported them in managing and strategically advancing the company. The executive board always informed the supervisory board immediately and in great detail. As chairman of the supervisory board, I was informed in between meetings continuously. I was in continuous dialogue with the chairman of the executive board. An essential part of the work of the supervisory board is done in the committees of the supervisory board. These bodies hold intensive subject-related discussions with the executive board.
In the framework of their responsibilities, they take decisions on subject matters and prepare the decisions of the supervisory board. The chairman of the committees report to the supervisory board on the work of the committees and ensure a close collaboration and adequate flow of information. The supervisory board and the executive board issued a corporate governance report, which can be found in the financial report from part 70 onwards. The corporate governance of Evonik Industries AG that is very important to the executive board and the supervisory board in greater detail. The activities of the supervisory board and its committees focused in 2018 on the business, on the situation and development of the company, including the company planning and the strategic further development of Evonik.
The supervisory board dealt with the acquisition of PeroxyChem, a global producer of hydrogen peroxide and peracetic acid, and the construction of new production capacities for Polyamide 12. The AGM on May 23rd, 2018, marked the end of the mandate of all supervisory board members. The supervisory board of Evonik Industries was newly appointed as scheduled. The AGM on May 23rd, 2018, elected the supervisory board members of the shareholder representation. With last year's AGM, Dr. Müller and Professor Herrmann left the supervisory board. To replace them, the AGM elected Mr. Spuhler and myself to the supervisory board. All other acting supervisory board members were re-elected at this AGM.
All members of the supervisory board were appointed for the period ending with the close of the AGM that ratifies the action of the executive board of the fourth fiscal year after the beginning of their time in office, without counting the business year when their term in office began. This means the mandate is expected to end in 2023 at the AGM. On the 20th of February 2018, the delegates assembly elected the supervisory board's member of the employer representation. The delegates assembly had to replace Mr. Herrmann, Pohlmann, Dr. Robers and Terbraak. With Mr. Barnhusen, Hofmann, Kubessa, and Dr. Sauer, electing them to the supervisory board with the end of the AGM on the 23rd of May 2018. All other acting supervisory board members of the employee representation were reelected at the delegates assembly.
With the end of last year's AGM on the 23rd of May 2018, the Supervisory Board held its inaugural meeting, where Ms. Glänzer was elected Deputy Chair and I, Chair of the Supervisory Board. On April 30th, 2019, for the employees' representation, Mr. Hofmann resigned his seat on the Supervisory Board. I would like to thank Mr. Hofmann for the trustful and good cooperation and wish him all the best for his future and continued success. Ms. Reisch was appointed by Essen local court pursuant to Section 104 Stock Corporation Act to succeed Mr. Hofmann as of the 13th of May 2019 as member of the Supervisory Board. I would like to give Ms. Reisch the opportunity to speak at this AGM, present herself as she is here today. Ms. Reisch, the floor is yours.
Mr. Tönjes, ladies and gentlemen, thank you very much for giving me the opportunity to speak as newly elected employee representative. My name is Martina Reisch, and I come from the southeast side of Evonik Industries in Germany from Rheinfelden. Those who are not familiar with the site, it's close to the Swiss border. I have worked at Evonik Industries and predecessor companies in 1989. As office clerk, I worked in different functions in a commercial area and after training as media specialist in technology at Rheinfelden site. Since 2010, I've been a full-time elected member of the Works Council for the Rheinfelden facility. In 2012, I took over the position of Deputy Chair, and since 2016, I've been the Chair. For seven years, I've been a member of the General Works Council of Evonik Industries AG.
I look forward to contributing my many years of professional experience to the work of the Supervisory Board and look forward to our collaboration. Thank you very much for your attention. Thank you very much, Ms. Reisch, for presenting yourself, and I look forward to collaborating with you. Ladies and gentlemen, due to the minimum share principle, Evonik Industries AG is required by law to ensure a share of minimum 30% men and 30% women on the Supervisory Board. In its current composition of the Supervisory Board, Evonik Industries AG complies with the statutory requirement and continues to do so with the judicial appointment of Ms. Reisch, a person to Section 104 of the Stock Corporation Act. For further information on the minimum share principle, please see the corporate governance report on pages 75 and following of the financial report.
Ladies and gentlemen, I would now like to ask the Executive Board Chair, Mr. Christian Kullmann, to report on the annual financial statement and the management report of the company and the Group on behalf of the Executive Board.
At last year's meeting, we presented our strategy and the related financial targets. Back then, I talked about the need to make changes to our portfolio, lasting cost discipline, and a shift in our corporate culture. We have worked hard on these targets in the past 12 months, and we have delivered. My feeling is that I have a very smooth voice today, actually, but obviously, the reception differs from then. This is why I've been handed out here a glass of water. We have signed an agreement, and we have worked hard on these targets in the past 12 months, and we have delivered. We have signed an agreement to sell our methacrylates business and have strengthened our portfolio by acquiring PeroxyChem.
The measures to enhance efficiency are having a positive impact on our figures, and despite the headwind at year-end, we clearly delivered on the forecast for 2018, which we raised in mid-year. Ladies and gentlemen, I would like to report on our successes in the next few minutes. I would also like to give you some information on what we want to do even better in the future. Naturally, ladies and gentlemen, I will also give you my views on our share price, which we currently consider to be anything but satisfactory. Ladies and gentlemen, allow me to start by looking at the consistent implementation of our strategy. We set out to build a best-in-class specialty chemicals company, and we have made good progress towards that goal. We are on a good path, indeed.
In 2018, we took several important steps to make our portfolio less cyclical and more robust. Altogether, it's become better. That includes divesting operations that no longer fit our strategy. This is the case now for our methacrylates business. We have sold a well-positioned business to the so-called best owner at a really good price of EUR 3 billion. In short, this is a successful deal for everybody involved. As the new owner of the methacrylates business, Advent International will continue to extend its technological edge and utilize opportunities for growth. The employees in this business can look forward to a new owner with a long-term focus and excellent expertise in the chemical industry. We will be using the selling price of EUR 3 billion to reduce our debt and further strengthen our portfolio.
That includes both in-house investment and selective acquisitions in our growth engines, where we already have a strong position. Apart from this big divestment, we have made an acquisition to strengthen our portfolio of specialty chemicals. The agreed purchase of the U.S. company, PeroxyChem, for $625 million is an ideal fit with our Resource Efficiency growth segment. It will add fast-growing, environment-friendly specialty applications to our portfolio. At the same time, we are continuing our organic growth. Good examples here are the investment in new capacity for silica and Polyamide 12. In particular, the planned Polyamide 12 facility will drive forward our high-margin specialty chemicals business. This investment is the biggest Evonik has made in Germany to date and will strengthen our site at Marl. That is clear evidence, ladies and gentlemen, that this region can be successful in international competition.
Provided that industrial policy moves in the right direction, it will be able to do so in the future as well. Systematic implementation of our strategy includes increased cost awareness. Our goal is to become faster and to become more efficient in administration and sales. In this way, we want to permanently reduce our cost base by EUR 200 million by the end of 2020. We made impressive headway towards this in 2018 with savings of over EUR 50 million, and another EUR 50 million are set to follow this year in 2019. To achieve this, we will be cutting around 1,000 jobs in administration and sales worldwide by the end of 2020. As you would expect, we are doing that in a socially compatible manner. It's not an easy task, of course, but we will do it in a socially compatible manner that respects the employees affected.
In Germany, there is a ban on dismissals for business-related reasons before mid-2023. As you can see, or as you can hear, we achieved a good deal in the past fiscal year. We intend to continue along this route, consistently that is. Building on the success of 2018, the team on the Executive Board will be working hard to achieve our goal of making Evonik a best-in-class specialty chemicals company. We want to turn a good Evonik into a better Evonik. We want to turn this company into the best company, into the best Evonik ever, namely a best-in-class specialty chemicals company. Ladies and gentlemen. Operationally speaking, 2018 was again a good year. The first six months were really successful, more than successful for Evonik, for our customers, and for the whole industry. We were able to grow significantly.
In the first half of the year, Evonik's earnings increased by around 15% year-on-year. In mid-2018, we therefore increased our outlook for the full year, and we achieved our higher forecast. We delivered actually on what we announced before. Although conditions became increasingly tough as a result of political and economic uncertainty. The second half of the year, in particular, was dominated by the escalating trade conflict between the U.S. and China, massive fluctuations in raw materials prices, and lower growth forecasts for the global economy. In addition, and this is also important, in addition, German chemical companies were hampered by the low water level in the River Rhine. This resulted in higher logistics costs and lower availability of raw materials. Evonik, nevertheless, held its own well. In fact, it did more than that.
We grew sales by 4% to EUR 15 billion, and EBITDA increased 10% year-on-year to EUR 2.6 billion. We also achieved a further improvement in our margin to 17%, a clear step towards our target of 18%-20%. Adjusted net income increased to EUR 1.3 billion. Based on the number of shares outstanding, that gives adjusted earnings per share of EUR 2.78, up from EUR 2.16 the year before. Ladies and gentlemen, our performance and achievements in 2018 would not have been possible without the enormous commitment of our employees, especially given the increasingly demanding operating environment. I am sure that you already applauded here because the highlight of this chapter is yet to come, and then you can applaud again, because then it comes to the crown jewels of this company, our employees, our workforce that is.
Having said this, I would like to ask you, dear shareholders all over the world, to join me in thanking our staff around the world most sincerely for that. Thank you very much. In addition, I would especially like to thank the employee representatives and the entire Supervisory Board for their trusting and constructive collaboration during the past fiscal year. To enable our employees to share in the increase in Evonik's value, we launched a further tranche of our employee share program in the spring for employees in Germany, the U.S.A., Belgium, Singapore, and in China. This program forms a strong cross-border link and helps strengthen corporate identity in the various regions. Worldwide, around 11,800 employees acquired shares in Evonik, giving a participation rate of nearly 40%.
This year, we purchased 681,009 shares for the employee share program at an average price of EUR 24.67 per share, each of which accounts for a proportionate share of the capital stock of EUR 1. Rest assured that I am a little relieved now because that was the most difficult sentence I was supposed to present today. That was equivalent to around 0.1% of our capital stock of EUR 466 million. We used the authorization granted by the annual shareholders meeting in 2016 to purchase these shares. Meanwhile, all the shares have been transferred to the eligible employees, and the surplus has been sold again on the market. Now, ladies and gentlemen, please allow me to talk briefly also about the development of our operating segments in the past fiscal year.
The Resource Efficiency segment continued its unbroken growth trend and now it generates earnings of EUR 1.3 billion, which is around half of Evonik's total earnings. The margin in this segment rose to a record level of over 22%. In this segment, we are benefiting from high capacity utilization and a positive price trend that supports the earnings growth, and we are optimistic that this positive trend will continue this year. 2018 was also a good year for the Nutrition & Care segment. The relatively negative trend in previous years was halted, and earnings increased last year by an impressive 8% to over EUR 800 million. The margin also improved to just over 17%, bringing us closer to our aspiration level. That was attributable to lower price erosion in the animal nutrition business.
As a result, the good development and strong growth in the other highly stable areas of this segment are finally becoming visible. Examples of this are our additives for personal care products and products for the pharmaceutical industry. These businesses should continue to do well this year, precisely because they are less cyclical. Moreover, we have successfully taken steps to secure our cost leadership in the animal nutrition business. We are not only defending our cost leadership, we want to improve on our cost leadership so that we can have a good future in this business. This is our goal. We believe that we are excellently prepared for the challenges of 2019. Performance Materials continue to perform at a very high level in 2018. This segment increased earnings further to EUR 670 million.
The methacrylates business benefited from the favorable supply and demand situation, so the timing of the divestment was smartly chosen. In the 2018 fiscal year, the C4 business reliably fulfilled its role as a stable financing generator with low investment requirements. Ladies and gentlemen, dear shareholders. Based on the performance I've just outlined, the Executive Board and Supervisory Board are again proposing a dividend of EUR 1.15 per share. With a dividend yield of around 5%, we are underscoring the attractiveness of our shares. We will continue our consistent dividend policy in the coming years to give our shareholders an attractive share in the success of the company. Holding the dividend at least stable with a payout ratio of around 40% of adjusted net income remains our goal, even after the divestment of the methacrylates business. Ladies and gentlemen, what are our expectations for the present fiscal year?
At the end of 2018, the outlook was dim. The economic experts feared that the global economy would collapse, led by the chemical industry as an early cyclical sector. Things have not turned out quite so badly. Nevertheless, the global economic challenges are increasing. This cannot be ignored. As a specialty chemicals company with a presence throughout the world, Evonik cannot completely escape the global economic trend. This is obvious. Therefore, excuse me. Now I'm grateful for the water. Against this backdrop, when we published our financial statements in March, we forecast that sales and adjusted EBITDA would be slightly lower or stable year-on-year. We were able to revise that forecast when we published our first quarter results. We improved the forecast. The methacrylates business is no longer part of our continuing operations.
For the remaining businesses, we expect sales and adjusted EBITDA to be at least in line with the prior-year level. This is another indication, a good indication of the development of our portfolio. It is becoming more stable and more robust with clear growth prospects, despite, ladies and gentlemen, and please bear this in mind, despite this year's challenging business conditions and challenging political conditions, which cannot really be described as being favorable. Ladies and gentlemen, the figures for the first quarter, which we published at the start of the month, confirm that our continuing operations made a solid start to the year. Sales increased slightly to EUR 3.3 billion in the first quarter of 2019. Adjusted EBITDA was EUR 539 million and earnings per share were EUR 0.53. The development of free cash flow, which is a key performance indicator, was clearly positive.
This shows the cash Evonik really earned, and that is available, for example, to finance growth or pay out dividends. Our goal for this year is to achieve a significant improvement in this indicator, and we achieved that in the first quarter with a free cash flow of EUR 159 million, an increase of more than EUR 100 million. Let us now turn our attention to the share price. The development of the share price in the second half of 2018 in particular had little to do with Evonik's operating performance, the quality of the performance. On the contrary, the stock markets were influenced primarily by political uncertainty and also uncertainty at the stock exchange. Evonik's shares were unable to avoid that. Our shares started 2018 at over EUR 31, and this was due to the economic environment.
The development of the company was so good, so that we were able to increase this to over EUR 32 by the end of September. This was followed by a continuous downward trend for the whole chemical industry and also for Evonik shares. The stock markets were increasingly dominated by political issues and growing fears of an economic downturn. The specter of a weakening Chinese economy on which we depend, as well as the negative development in the automotive industry, profit warnings of our competitors led in the fourth quarter to a sharp drop in share prices. This development clearly reflects the role of the chemical industry as an early cycle sector. Rising uncertainty in the markets led to a sell-off of shares in this sector, really.
What is particularly regrettable from our point of view, from the point of view of the employees, from the perspective also of the executive board, this is really painful, is the divergence between the performance of our share price and our continued solid operating performance. Evonik was therefore a victim of circumstances. As I've just shown, ladies and gentlemen, operationally speaking, we delivered in difficult business conditions, yet this was nonetheless not rewarded. What does this mean? This means mainly one thing, we have to continue our work. We have to improve. The situation has improved slightly in recent months. Speaking of improvement, our share price has risen by almost 20% since the start of the year from a low level, and we are convinced that if we continue to implement our strategy consistently, this will be reflected also in our share price in the longer term.
Ladies and gentlemen, dear shareholders, I would be delighted if you would continue to place your confidence in Evonik in the future. Together with my colleagues on the executive board, I would like to thank you very much for your trust, your interest, and your attention. Thank you very much.
Mr. Kullmann, thank you very much for your statement. I would like to congratulate you and the entire executive board on this very impressive performance in 2018. I would like to point out that the statements of Mr. Kullmann are available in printed form at the information desk in the lobby and at the back of this hall at the desk. Ladies and gentlemen, I would not only like to say thank you to the executive board, but also to the employees of Evonik Industries AG for their great work and what they achieved in the past fiscal year. I think I can do so on behalf of the shareholders, the applause that we heard as a reaction to the statement of the executive board is a good sign of this.
In my opinion, this was the best year in the young history of Evonik, and I would like to ask the executive board to convey my thanks to the employees of the company.