Technology sales drove progress for Hartmann in Q2 2016

Hartmann grew revenue and lifted both operating profit and the profit margin in the second quarter of 2016. The improvements were driven by a high level of activity in Hartmann Technology, whereas packaging volumes were flat and the group's business performance was stable. In Europe, results continue to benefit from our efforts to improve efficiency, while our activities in the Americas reported a slight decline in packaging sales. The capacity expansion programme in the Americas is proceeding according to plan, and full-year 2016 guidance is maintained.

CEO Ulrik Kolding Hartvig: "We achieved a solid performance in the second quarter with strong machinery sales driving growth in both revenue and earnings. We kept our focus on efficiency and growth, continuing our efforts to improve efficiency in Europe and expand capacity in the Americas, where growth potential remains strong despite a slight decrease in packaging volumes in the second quarter and adverse repercussions from macroeconomic developments in South America."

Q2 2016

In Q2 2016, total revenue grew to DKK 537 million (2015: DKK 481 million) and operating profit* to DKK 63 million (2015: DKK 42 million), corresponding to a profit margin* of 11.6% (2015: 8.8%).
Our European business reported revenue of DKK 330 million (2015: DKK 266 million) and an operating profit of DKK 40 million (2015: DKK 11 million), corresponding to a profit margin of 12.1% (2015: 4.2%). The improvement was driven by strong activity in Hartmann Technology and the positive impact of efficiency-improving measures and lower variable costs in the European business.
Revenue from the Americas totalled DKK 207 million (2015: DKK 215 million), and operating profit came to DKK 31 million (2015: DKK 37 million), corresponding to a profit margin of 14.7% (2015: 17.0%). The performance was adversely impacted by lower packaging volumes and higher production costs.
Cash flows from operating activities were a net inflow of DKK 44 million (2015: DKK 90 million).

H1 2016

In H1 2016, revenue totalled DKK 1,091 million (2015: DKK 1,061 million), and operating profit came to DKK 143 million (2015: DKK 104 million), corresponding to a profit margin of 13.1% (2015: 9.8%).
The European business grew revenue to DKK 663 million (2015: DKK 608 million) and operating profit to DKK 84 million (2015: DKK 44 million), corresponding to a profit margin of 12.7% (2015: 7.2%).
Revenue from the Americas was DKK 429 million (2015: DKK 454 million), and operating profit came to DKK 74 million (2015: DKK 72 million), corresponding to a profit margin of 17.2% (2015: 15.9%).
Cash flows from operating activities were a net inflow of DKK 138 million (2015: DKK 118 million), and the return on invested capital was 25% (2015: 22%).

Currency movements partly offset by inflation

Currency fluctuations reduced revenue by DKK 43 million in the second quarter and DKK 94 million in the first half of 2016, while trimming DKK 3 million and DKK 8 million off operating profit for the second quarter and the first half of 2016, respectively. The currency effects primarily related to the activities in South America, with local currency depreciation being largely neutralised by inflation-induced price increases.

Outlook for 2016

We maintain our full-year guidance of revenue in the DKK 2.1-2.2 billion range and a profit margin of 11-12.5%.
Our total capital expenditure for 2016 is expected to amount to around DKK 350 million.

On 19 August at 9.00 (CET), Hartmann will host a conference call at which CEO Ulrik Kolding Hartvig and CFO Marianne Rørslev Bock will review the financial results, the outlook and answer questions. Registration is not required. The conference call will be conducted in English and can be heard live at investor.hartmann-packaging.com, where relevant telephone numbers, conference code and the accompanying presentation will be available.

For further information, please contact:

Ulrik Kolding Hartvig
CEO
Phone: (+45) 45 97 00 57

* Operating profit refers to operating profit before special items and profit margin to profit margin before special items, unless otherwise stated.

HUG#2035946