8.3.2022 16:50:40 CET | Brødrene Hartmann A/S | Annual Financial Report

In 2021, Hartmann worked persistently and determinedly to expand the group’s presence and market share and to secure earnings in turbulent markets that were affected by historically steep increases in prices of recycled paper and energy and highly volatile demand for egg packaging during the COVID-19 pandemic.

2021 saw a strong increase in costs in the wake of sharp increases in prices of recycled paper and energy, the two most important raw materials for Hartmann’s production. In some markets, the price of recycled paper surged by more than 60%, while the price of natural gas had increased more than seven-fold by 31 December 2021 compared to the end of 2020. Faced with these difficult conditions, Hartmann continued and stepped up the efforts to enhance production efficiency, but the group also had to raise average selling prices. These measures partially, and at a certain time lag, mitigated the effects of rising raw materials prices, enabling Hartmann to deliver a profit margin of 9.2%. Hartmann continues the efforts to deliver a satisfactory profit margin in 2022 amid the difficult conditions.

CEO Torben Rosenkrantz-Theil says: “Holding a strong position in our markets, we continued to expand our production capacity in 2021 to accommodate long-term growth in demand and win additional market share. In 2022, we will continue our efforts to enhance production efficiency and lift selling prices with a view to steering Hartmann through a period of high volatility impacted by dramatic raw material price increases, historical geopolitical tension in the wake of Russia’s invasion of Ukraine and continued effects of COVID-19.”

2021

• Group revenue increased to DKK 2,744 million (2020: DKK 2,567 million).
• Operating profit* was DKK 250 million (2020: DKK 452 million) corresponding to a profit margin of 9.2% (2020: 17.5%).
• Investments increased to DKK 542 million (2020: DKK 437 million).

Guidance for 2022

Hartmann expects to grow overall revenue to DKK 2.9-3.3 billion for a profit margin of 2-7% in 2022 with growth being driven primarily by volume growth and improved average selling prices.

Persistently high prices of recycled paper and energy, Hartmann’s most important raw materials, are expected to impact on the group’s earnings and profit margin. High raw materials prices are expected to lead to a significant increase in production costs, which the group intends to offset by means of continuing efforts to adjust selling prices and improve the overall price and product mix. However, due to the duration of existing customer agreements, price adjustments will be implemented at a certain time lag. The historically high volatility of raw materials prices is causing significantly reduced visibility and increased uncertainty about developments in the group’s cost levels.

COVID-19 is causing heightened operational risk and may still result in manning challenges, highly volatile foreign exchange rates and reduced visibility.

Investments are expected at around DKK 225 million in 2022.

* Operating profit and profit margin are stated before restatement for special items and hyperinflation.

Contacts

• Torben Rosenkrantz-Theil, CEO, (+45) 31 21 68 72

About Brødrene Hartmann A/S

Hartmann is the world’s leading manufacturer of moulded-fibre egg packaging and a market-leading manufacturer of fruit packaging in South America and India. The group is also the world’s largest manufacturer of technology for the production of moulded-fibre packaging. Founded in 1917, Hartmann’s market position builds on its strong technology know-how and extensive experience of sustainable moulded-fibre production dating back to 1936. Hartmann sells egg and fruit packaging to manufacturers, distributors and retail chains, which are increasingly demanding sustainable packaging solutions and specialised marketing expertise. Our versatile product portfolio is customised to accommodate customer and consumer needs in each individual market. Hartmann sells machinery and technology to manufacturers of moulded-fibre packaging in selected markets. Headquartered in Gentofte, Denmark, Hartmann has 2,800 employees. Hartmann’s production platform consists of 15 factories in Europe and Israel, North and South America, and India and Russia.

Attachments

• Hartmann Annual report 2021.pdf