Packaging volumes made further headway and core business revenue grew in the second quarter of 2017. As expected, the contribution from Hartmann Technology was notably down on Q2 2016 due to phasing in relation to the delivery of orders. The temporary shortfall in technology revenue and earnings and the ongoing expansion and commissioning of new production capacity had an adverse impact on revenue and operating profit. The first phase of the current European capacity expansion programme was completed in Q2 2017, and production at the new factory in the US started up according to plan. Hartmann expects H2 results to reflect higher sales in Hartmann Technology and enhanced utilisation of the expanded production capacity and accordingly maintains its full-year guidance.
CEO Ulrik Kolding Hartvig: "Packaging volumes continued their upward trend in the second quarter of the year, and we added capacity in Europe and commenced production at our new factory in the US as planned. We expect to meet our 2017 guidance by lifting both revenue and operating profit in the second half of the year, supported by our new production capacity and the delivery of more technology orders."
Q2 2017
- Revenue was DKK 514 million (2016: DKK 537 million), and operating profit came to DKK 32 million (2016: DKK 63 million), taking the profit margin to 6.2% (2016: 11.6%). This performance mainly reflected phasing in relation to the delivery of Hartmann Technology orders.
- The European business generated revenue of DKK 280 million (2016: DKK 330 million) and operating profit of DKK 14 million (2016: DKK 40 million), bringing the profit margin to 4.9% (2016:12.1%). The core business maintained momentum in Q2 2017, supported by growing packaging volumes, efficiency gains and reduced energy costs. However, this progress was outweighed by lower revenue and earnings in Hartmann Technology.
- The business in the Americas grew revenue to DKK 234 million (2016: DKK 207 million), supported by an increase in packaging volumes. Affected by production costs and depreciation charges related to the establishment and commissioning of production capacity, operating profit fell to DKK 25 million (2016: DKK 31 million), taking the profit margin to 10.4% (2016: 14.7%).
- The return on invested capital was 15% (2016: 25%).
H1 2017
- Revenue totalled DKK 1,087 million (2016: DKK 1,091 million), and operating profit came to DKK 93 million (2016: DKK 143 million), bringing the profit margin to 8.5% (2016: 13.1%).
- The European business reported revenue of DKK 601 million (2016: DKK 663 million) and operating profit of DKK 55 million (2016: DKK 84 million), for a profit margin of 9.1% (2016: 12.7%).
- Our operations in the Americas grew revenue to DKK 486 million (2016: DKK 429 million), while operating profit came to DKK 55 million (2016: DKK 74 million), for a profit margin of 11.4% (2016: 17.2%).
Guidance for 2017
- We maintain our full-year guidance of revenue of DKK 2.2-2.3 billion and a profit margin of 11-12.5%.
- Our total capital expenditure is expected to be around DKK 200 million, against the previous forecast of DKK 250 million. Our guidance of a return on invested capital of around 18% is reiterated.
On 30 August 2017 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 the accompanying presentation will be available.
For further information, please contact:
Ulrik Kolding Hartvig
CEO
Phone: (+45) 45 97 00 57