Hartmann delivered strong performance in Q3 2019

Hartmann reported strong revenue and earnings growth in Q3 2019 on the back of a solid core business performance and higher machinery and technology sales. Hartmann now expects revenue to reach the upper end of the DKK 2.2-2.4 billion range with a profit margin around 11%, and continued investments in new capacity lay the groundwork for additional volume growth in the years ahead.Group revenue increased to DKK 591 million (2018: DKK 453 million)Revenue from packaging sales grew to DKK 547 million (2018: DKK 446 million)Operating profit* increased to DKK 81 million (2018: DKK 26 million) corresponding to a profit margin* of 13.3% (2018: 5.4%)Capital expenditure* increased to DKK 58 million (2018: DKK 32 million)Currency movements reduced revenue by DKK 30 millionCEO Torben Rosenkrantz-Theil says: “Sales of sustainable moulded-fibre packaging were strong in Q3 2019, and our technology and machinery business also contributed to the positive development. Based on this momentum, we are on track to deliver higher revenue and earnings this year, and we will continue to invest in production capacity to be able to meet current and future demand.”Sustaining volume growth
Hartmann continued to grow packaging sales in all markets in Q3. Sales were particularly strong in Europe and North America.
Lifting machinery sales
As expected, Hartmann Technology was a driving force behind the strong Q3 performance. Overall, sales of machinery and technology are still expected to normalise in 2019 at a level down from the 2018 high.
Improving profitability
The solid core business performance combined with higher machinery sales drove a strong improvement in profitability in the third quarter. The Q3 performance was further supported by substantial licence income.
Investing in new capacity
Hartmann expanded its European production capacity in the third quarter and prepared additional capacity for commissioning in Q4. The work to expand capacity in Brazil, the USA and Europe in 2020 continued.
Guidance for 2019
Hartmann now expects total revenue to reach the upper end of the previously announced DKK 2.2-2.4 billion range after restatement for hyperinflation. The profit margin is expected to reach
around 11% before restatement for hyperinflation against the previous guidance of a profit margin between 9% and 11% before restatement for hyperinflation.
The group’s performance in the final quarter of the year is expected to be favourably affected by continued volume growth, higher average selling prices and efficient core business operations and adversely affected by a normalised, reduced contribution from Hartmann Technology compared with 2018.Capital expenditure is expected to amount to about DKK 250 million before restatement for hyperinflation, compared with the previous estimate of about DKK 300 million. The adjustment is
attributable to protracted administrative processing related to the establishment of Hartmann’s new factory in Brazil and a resulting postponement of the group’s capacity expansion investments. Still, the new capacity is expected to be put into operation in 2020.

For further information, please contact:
Torben Rosenkrantz-Theil
CEO
(+45) 45 97 00 57
* Operating profit and profit margin are stated before special items, and profit margin, return on invested capital and capital expenditure are commented before restatement for hyperinflation.AttachmentInterim report Q3 2019

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