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.
- 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.”
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.
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