Revenue increased in the first six months of 2010, primarily due to developments
in exchange rates. The '10 in 10' initiatives had the anticipated effect,
volumes grew, and the product and price mix improved. The period was adversely
affected by a slowdown in industrial packaging activities, increasing raw
material prices and additional costs. As a result, operating profit for H1 2010
was lower than expected. As already announced, Hartmann has downgraded its
expectations for its EBIT margin for 2010 to approximately 7%.
Peter Arndrup Poulsen, CEO, on the Group's performance in H1 2010:
We are pleased to see that our '10 in 10' initiatives produced the expected
effects in H1 2010, and that volumes grew and our product and price mix
improved. However, we were unfortunately also affected by increasing raw
material prices, additional fixed costs and a slowdown in industrial packaging
activities. As a result, our operating profit for H1 2010 was lower than
expected.
On the outlook for 2010:
Having to downgrade our EBIT margin forecast for 2010 to approximately 7% prior
to releasing our interim report for H1 2010 was unsatisfactory. The substantial
increase in raw material prices, in particular, changed the picture.
Fortunately, we can see that our many efficiency optimisation initiatives have
produced the intended results so far, and that our underlying operations remain
strong. We have thus established a solid basis for further growth.
Highlights
The Group reported consolidated revenue for Q2 2010 of DKK 326 million (2009:
DKK 310 million) and an operating loss of DKK 7 million (2009: an operating
profit of DKK 12 million). Hartmann's revenue for H1 2010 came to DKK 706
million (2009: DKK 675 million), and the Group generated an operating profit of
DKK 31 million (2009: DKK 24 million) and achieved an EBIT margin of 4.3%.
The business area Europe reported revenue for Q2 2010 of DKK 256 million (2009:
DKK 255 million) and an operating profit of DKK 7 million (2009: DKK 18
million). Revenue for H1 2010 was DKK 562 million (2009: DKK 555 million) and
operating profit DKK 55 million (2009: DKK 44 million). The performance was
positively affected by favourable developments in exchange rates, a slight
increase in volumes, an improved product and price mix within egg packaging and
the operational improvements implemented. The performance was adversely affected
by a slowdown in industrial packaging activities, increasing raw material prices
and additional costs.
The North American operations reported revenue for Q2 2010 of DKK 54 million
(2009: DKK 41 million) and an operating profit of DKK 2 million (2009: an
operating loss of DKK 2 million). Revenue for H1 2010 was DKK 107 million (2009:
DKK 81 million) and the operating profit DKK 5 million (2009: an operating loss
of DKK 3 million). This trend was primarily attributable to positive effects of
developments in exchange rates and, to a lesser degree, to organic growth and an
improvement of the product and price mix.
Hartmann's other business areas, including costs relating to group functions,
generated revenue for Q2 2010 of DKK 16 million (2009: DKK 14 million) and an
operating loss of DKK 17 million (2009: an operating loss of DKK 7 million). The
other business areas reported revenue for H1 2010 of DKK 38 million (2009: DKK
38 million) and an operating loss of DKK 33 million (2009: an operating loss of
DKK 20 million). The period was adversely affected by a number of additional
costs incurred in connection with group functions, e.g. due to advancement of a
number of planned, new strategic measures in addition to the '10 in 10'
initiatives already being implemented.
As announced in company announcement no. 14/2010, Hartmann has downgraded its
EBIT margin forecast for 2010 to approximately 7%, down from the previous
forecast of approximately 10% (actual 2009: 5.7%). The revised EBIT margin
corresponds to an expected operating profit for 2010 in the region of DKK
90-105 million against the original forecast of approximately DKK 140 million
(actual 2009: DKK 79 million).
Brødrene Hartmann A/S
Peter Arndrup Poulsen
CEO
Mobile: +45 51 51 40 69
[HUG#1440075]
