19.5.2022 13:54:19 CEST | Brødrene Hartmann A/S | Interim report (Q1 and Q3)

Hartmann delivered solid performance and maintained market share in Q1 in the face of challenging market conditions after taking decisive action to counter the negative impact of historically high raw material prices. The group generated strong revenue growth after lifting selling prices in decisive and continuous efforts to mitigate the dramatic development in external production costs and secure decent earnings. Guidance for 2022 is maintained.

Revenue grew significantly in the quarter compared to Q1 2021, which was impacted by licence income of DKK 78 million. Growth was particularly strong in North America and driven by an overall increase in average selling prices supported by higher sales volume. Demand for egg packaging remained subdued in the quarter.

The historically high energy and recycled paper prices as well as general inflationary pressure entailed a significant decline in earnings and profitability in Q1 2022. The downwards pressure on the profit margin was partly alleviated by Hartmann's targeted efforts to increase average selling prices across all markets and cost reduction initiatives.

Following a period of high investments, Hartmann reduced the investment level in Q1 2022, focusing mainly on the USA and Europe. After the balance sheet date, Hartmann initiated a sales process for its Russian factory as a consequence of the Russian invasion of Ukraine.

Q1 2022

  • Group revenue increased to DKK 776 million (2021: DKK 750 million).
  • Operating profit* declined to DKK 44 million (2021: DKK 180 million) corresponding to a profit margin of 5.7% (2021: 24.0%).
  • Investments declined to DKK 40 million (2021: DKK 185 million).

CEO Torben Rosenkrantz-Theil says: ”The first quarter was marked by unprecedented volatility in terms of continued increases in raw material prices driven by the intensification of the energy crisis in the wake of the war in Ukraine. We focused on protecting profitability by alleviating the negative effects through continued efforts to lift selling prices and pass on the higher raw material costs, while increasing sales volume from our expanded production platform.”

2022 outlook

Hartmann maintains 2022 guidance, expecting to grow overall revenue to DKK 2.9-3.3 billion for a profit margin* of 2-7% with growth being driven by both improved average selling prices and volume growth.

Persistently high prices of recycled paper and energy as well as rising inflation are expected to impact on the group’s earnings and profit margin. High raw materials prices are expected to lead to a continuation of the increases in production costs, which the group intends to offset by means of continuing efforts to adjust selling prices, improve the overall price and product mix, and reduce the cost level. Price adjustments will, however, be implemented at a certain time lag.

Full-year revenue will be negatively impacted by Hartmann's decision to initiate a sales process for the group's Russian factory and stop all export sales to Russia as well as a dramatic decline in sales to Ukraine following the Russian invasion.

The historically high volatility of energy and recycled paper prices is causing significantly reduced visibility and increased uncertainty about developments in the group’s cost levels.

Investments are still expected at around DKK 225 million in 2022.

 

* Operating profit and profit margin are stated before restatement for special items and hyperinflation.

Contacts

  • Torben Rosenkrantz-Theil, CEO, (+45) 45 97 00 57

About Brødrene Hartmann A/S

Hartmann is the world’s leading manufacturer of moulded-fibre egg packaging and a market-leading manufacturer of fruit packaging in South America and India. The group is also the world’s largest manufacturer of technology for the production of moulded-fibre packaging. Founded in 1917, Hartmann’s market position builds on its strong technology know-how and extensive experience of sustainable moulded-fibre production dating back to 1936. Hartmann sells egg and fruit packaging to manufacturers, distributors and retail chains, which are increasingly demanding sustainable packaging solutions and specialised marketing expertise. Our versatile product portfolio is customised to accommodate customer and consumer needs in each individual market. Hartmann sells machinery and technology to manufacturers of moulded-fibre packaging in selected markets. Headquartered in Gentofte, Denmark, Hartmann has 2,800 employees. Hartmann’s production platform consists of 15 factories in Europe and Israel, North and South America, and India and Russia.

Attachments

  • Hartmann interim report Q1 2022.pdf

© Ritzau Denmark, source Ritzau English Regulatory Releases