Paul Hartmann : Q2/2022 Quarterly Information

INFORM

INFORMATION FOR OUR SHAREHOLDERS FOR THE FIRST HALF YEAR OF 2022

2 Inform first half year 2022 | The HARTMANN GROUP at a glance

THE HARTMANN GROUP AT A GLANCE

The HARTMANN GROUP is one of the leading European providers of professional medical and care products and associated services. Every day, healthcare professionals and patients rely on HARTMANN brands in the segments of Incontinence Management (e.g. MoliCare®), Wound Care (e.g. Zetuvit®) and Infection Management (e. g. Sterillium®). This is expressed in our brand promise of "Helps. Cares. Protects.". Founded in 1818, the company sells with its products and solutions in 130 countries around the world. For the future, the HARTMANN GROUP is currently implementing its strategic Transformation Program with its high-performance,customer-oriented and passionate team.

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KEY PERFORMANCE INDICATORS OF THE HARTMANN GROUP AS OF JUNE 30

in EUR million, rounding differences not balanced out

						Change over previous year
		2021	2022	absolutely	in %
Sales revenues		1,153.3		1,122.8		−30.5			−2.6
of which foreign share in %	66.1		68.7
Organic sales growth in %	−5.0	−3.6
Adjusted EBITDA	148.2		88.5		−59.7	−40.3
Return on adjusted EBITDA in %	12.8	7.9
Equity ratio in %	57.9		60.6		2.7%-Pt.
Net financial position	17.7		−96.0	−113.7	−642.2

CONTENTS OVERVIEW

The HARTMANN GROUP at a glance	2
To our shareholders	3
Business development	4
The HARTMANN share	6
Increased material, transport and energy costs	7
Additional updates	9
Data protection information	11
Imprint	12

Title: In order to ensure delivery capability to its customers, HARTMANN has, among other things, significantly increased its inventory stock levels.

In the first half of 2022, HARTMANN GROUP sales revenues amounted to EUR 1,122.8 million. This corresponds to an organic

­decline in sales of −3.6% compared to the same period of the previous year. Adjusted EBITDA amounted to EUR 88.5 million, which corresponds to a decline of EUR 59.7 million compared to the same period in 2021, in line with expectations.

In addition to declining markets for the Company's business segments as a result of the coronavirus pandemic, the first six months were significantly influenced by massively rising costs for materials, transport and energy.

On the one hand, HARTMANN focused on counteracting these rising expenses by adjusting prices as well as by cutting costs and increasing efficiency. On the other hand, immediate measures were taken to reduce gas dependency in production and build up larger stock levels. The primary objective is to ensure the Company's ability to supply customers.

Thanks to the project results of the Transformation Program, HARTMANN has so far coped well with the crisis, being able to ­relativize the impact on earnings caused by the considerable increase in material and energy costs. Sticking to the Transformation Program will be essential to continue strengthening the Company in and after the crisis.

Depending on the availability and prices of raw materials and energy sources, HARTMANN has developed various scenarios with corresponding countermeasures and different effects on business development. The currently most likely scenario confirms the forecast published in the 2021 Annual Report: a moderate organic decline in sales and a declining adjusted EBITDA of EUR 190 to 230 million. However, depending on how the increased geopolitical and macroeconomic risks develop, there may be negative deviations.

On the following pages, we provide you with detailed information on our key financial figures and address the issues we are focusing on at HARTMANN: the rising cost of materials, transport and energy, the Russia-Ukraine war and some of our digitalization projects.

Kind regards and stay healthy!

Britta Fünfstück

4 Inform first half year 2022 | Business development

BUSINESS DEVELOPMENT FOR FIRST HALF OF 2022

Rising costs affect business performance

HARTMANN's business development in the first half of 2022 was characterized by declining markets for business segments as a result of the coronavirus pandemic, but mainly by the massive increase in material, transport and energy costs. With the outbreak of the Russia-Ukraine war, raw material prices have further increased, while global supply chains and energy supplies have become increasingly destabilized. These developments also pose major challenges for the medical technology sector. Across all business segments, HARTMANN generated sales revenues of EUR 1,122.8 million in the first six months of the year. This represents a moderate organic decline in sales of −3.6% compared to the same period last year.

HARTMANN's main focus is on counteracting the higher costs, on the one hand, while ensuring delivery capability to custom- ers, on the other. The Company took measures to this end at an early stage, such as price adjustments, cost savings, efficiency improvements, reducing gas dependency in production and increasing stock levels.

The consistent pursual of the strategic Transformation Program has also proven its worth in the current situation. In addition to its focus on the Company's costs position, HARTMANN is also benefiting from the projects already implemented to date.

Segments remain within expectations

In the Wound Care segment, HARTMANN generated sales of EUR 267.1 million in the first six months of 2022. Compared to the prior-year period, which was heavily impacted by the pan- demic, especially in the first quarter, this corresponds to an organic sales increase of 12.4%. In addition to superabsorbent and silicone-coated products in the field of modern wound care, non-adhesive fixations and compressions in traditional wound care as well as Vivano® products for negative pressure wound therapy developed positively.

In the Incontinence Management segment, HARTMANN recorded sales revenues of EUR 350.2 million in the first half of the year. Compared to the same period of the previous year, this corresponds to an organic sales increase of 3.1%. The normalization of bed occupancy rates in geriatric and nursing homes made a positive contribution to this, as did business with inlays, gender-specific pants and skin care products. At the same time, higher material, transport and energy costs had a significant negative impact on the segment's earnings.

Sales in the Infection Management segment amounted to EUR 284.2 million in the first half of the year. The organic decline in sales of −24.5% compared to the first half of 2021 is primarily due to the absence of the special positive effect which the pandemic had on hand disinfectants and gloves.

The Complementary Group Divisions segment generated sales of EUR 221.2 million in the first two quarters. Organic sales growth was 5.2% compared to the same period of the previous year. However, earnings were impacted by high material, transport and energy costs. At CMC Group, sales growth in absorbent cotton and baby care products, in particular, contributed to the segment's growth. At the KOB Group, sales of compression bandages developed particularly well. The KNEIPP Group increased its sales in Japan, while in Europe it recorded a notice­ able decline in sales in light of a currently declining market.

SHARE OF TOTAL SALES BY BUSINESS SEGMENT in EUR million and percent

Complementary Group		Wound
Divisions		Care
221.2 | 19.7%		267.1 | 23.8%

Infection		Incontinence
­Management		Management

284.2 | 25.3%	350.2 | 31.2%

Inform first half year 2022 | Business development

5

Decline in sales in the core market of Germany

Number of employees stable

In the German core sales market, HARTMANN recorded an organic decline in sales of −10.3% in the first half of the year compared to the same period of the previous year. With an organic sales decline of −0.1% compared to 2021, the Group's performance in the economic region Europe, Middle East and Africa (EMEA, excluding Germany) was similar to the Americas region which was equally stable. Organic sales in the Asia-Pacific (APAC) region were also almost on a par with the previous year, declining by −0.6%.

Cost increases impact earnings

HARTMANN achieved adjusted EBITDA of EUR 88.5 million and an adjusted EBITDA margin of 7.9% in the first half of 2022. The decrease of EUR 59.7 million, compared to the adjusted EBITDA of the prior-year period, is partially influenced by the decline in sales, but to a much larger extent by the rise in material, transport and energy costs.

Equity ratio increased

HARTMANN's equity ratio at the end of the second quarter of 2022 was 60.6%, 2.7 percentage points above the prior-year figure of 57.9%. The net financial position decreased by EUR 176.6 million to EUR −96.0 million, compared to the end of financial year 2021. This is due to the high level of investment activity and the increased capital commitment for stock levels to ensure delivery capability.

SHARE OF TOTAL SALES BY REGION

in EUR million and percent

The HARTMANN GROUP employed 10,479 people worldwide as of June 30, 2022. This corresponds to a slight decrease of −1.4% compared to the end of financial year 2021.

NUMBER OF EMPLOYEES IN THE HARTMANN GROUP

31.12.2021 30.06.2022

4,375		4,340	Germany

5,281

5,223

Europe excluding Germany

			972			916	Outside Europe
Employees	10,628	10,479

Outlook

The current geopolitical and global economic situation represents a high degree of forecast uncertainty for the second half of 2022. HARTMANN is actively addressing the situation and has developed various scenarios depending on the availability

APAC

66.1 | 5.9%

Americas

34.7 | 3.1%

Germany

352.0 | 31.3%

and price development of raw materials and energy sources. These include an analysis of the impact on business development as well as corresponding countermeasures. The most likely scenario for the Company at present is one that confirms the forecast for 2022 published in the 2021 Annual Report. This forecast assumes HARTMANN will see a moderate organic decline in sales and a decline in adjusted EBITDA of EUR 190 to 230 million. However, depending on how the increased geopo­ litical and overall economic risks develop, negative deviations may occur.

EMEA (excl. Germany)

670.0 | 59.7%