Though faced with lower packaging volumes, Hartmann performed in line with expectations in 2016, lifting earnings in a year when our main focus was on unpacking the group's long-term potential through substantial investments. Establishing new factories in the Americas and expanding existing production capacity in Europe, Hartmann is currently building a solid platform for growth in the years ahead.
CEO Ulrik Kolding Hartvig: "Although we were faced with declining packaging volumes, we sustained our earnings momentum in 2016 and made substantial investments to continue our positive growth trajectory in the years ahead."
Q4 2016
- Revenue amounted to DKK 523 million (2015: DKK 564 million), and operating profit came to DKK 59 million (2015: DKK 78 million), taking the profit margin to 11.2% (2015: 13.9%). This performance was driven by lower average selling prices in Europe and reduced revenue from Hartmann Technology, coupled with a decline in packaging volumes and higher fixed costs in the Americas.
- The European business reported revenue of DKK 313 million (2015: DKK 348 million) and operating profit of DKK 50 million (2015: DKK 43 million), taking the profit margin to 16.1% (2015: 12.4%). Sustained high capacity utilisation and efficiency-improving measures lifted profitability, supported by lower energy and transport costs.
- Revenue from the Americas totalled DKK 210 million (2015: DKK 216 million), and operating profit came to DKK 13 million (2015: DKK 41 million), corresponding to a profit margin of 6.3% (2015: 19.0%). This performance was the result of lower packaging volumes and higher depreciation charges and fixed costs resulting from the establishment of three new factories not contributing tothe operating profit during ramp-up.
- Revenue totalled DKK 2,096 million (2015: DKK 2,133 million), and operating profit increased to DKK 248 million (2015: DKK 234 million), taking the profit margin to 11.8% (2015: 11.0%). Our total capital expenditure was DKK 340 million against the guidance of DKK 300-325 million. The return on invested capital was 21% (2015: 22%).
- The board of directors proposes a dividend of DKK 9.50 (2015: DKK 9.50) per share.
- The European business grew revenue to DKK 1,258 million (2015: DKK 1,248 million) and operating profit to DKK 164 million (2015: DKK 112 million), bringing the profit margin to 13.1% (2015: 9.0%).
- Our business in the Americas reported revenue of DKK 838 million (2015: DKK 886 million), operating profit of DKK 116 million (2015: DKK 146 million) and a profit margin of 13.8% (2015: 16.5%).
- Foreign exchange developments reduced revenue by DKK 125 million and operating profit by DKK 15 million in 2016. Primarily related to the activities in South America, the currency effects were to some extent neutralised by inflation-induced price increases.
- Revenue is expected to amount to DKK 2.2-2.3 billion in 2017. The profit margin is expected to be 11.0-12.5%, impacted by a temporary setback in packaging volumes in the Americas and late completion of the US factory and commissioning of the expanded capacity in South America.
- Our total capital expenditure is expected to be about DKK 250 million in 2017, and the return on invested capital is estimated at 18%.
- Our previously announced financial targets for 2017 of revenue of DKK 2.2-2.4 billion and a profit margin of 12-14% have been postponed till end-2018.
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 refers to profit margin before special items.
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