While Hartmann grew packaging sales across its markets in the third quarter, compared with the year-earlier period, earnings were impacted by significantly higher energy costs and a claim from the Danish Energy Agency for repayment of a public grant. Moreover, as expected, technology sales fell in the third quarter following delivery of a number of orders in the first half of the year.
The work to enhance capacity utilisation in the Americas and expand production capacity in Europe continued in the third quarter. Hartmann also accelerated its efforts under the 'Perform 2018' programme, which is still progressing as planned.
CEO Torben Rosenkrantz-Theil: "We kept our momentum in packaging sales and capitalised on volume growth to partially offset higher energy costs in the third quarter. Despite the negative impact of the warm summer, we managed to lift European sales, and we made progress in the Americas as well."
Q3 2018
- Revenue totalled DKK 453 million (2017: DKK 557 million) after restatement for hyperinflation* (DKK -39 million), and operating profit* was DKK 26 million (2017: DKK 69 million), for a profit margin* of 5.4% (2017: 12.4%).
- In Europe, revenue fell to DKK 290 million (2017: DKK 340 million), and operating profit declined to DKK 12 million (2017: DKK 52 million), for a profit margin of 4.1% (2017: 15.2%). With growing volumes, this development was driven by the, expected, lower contribution from technology sales, significantly higher energy costs and a claim for repayment of a public energy grant.
- Although the business in the Americas lifted packaging sales, revenue dropped to DKK 163 million (2017: DKK 217 million) due to restatement for hyperinflation (DKK -39 million). Operating profit came to DKK 17 million (2017: DKK 23 million), for a profit margin of 8.5% (2017: 10.5%), impacted mainly by higher production costs and energy and other raw materials costs.
- In addition to hyperinflation, consolidated revenue was impacted by fluctuations in currencies in the amount of DKK -41 million, while operating profit was reduced by DKK 6 million.
- Special items amounted to a net expense of DKK 9 million (2017: DKK 0 million).
- Return on invested capital (ROIC)* rose to 19% (2017: 16%).
9M 2018
- Revenue totalled DKK 1,619 million (2017: DKK 1,643 million) after restatement for hyperinflation (DKK -39 million), and operating profit was DKK 178 million (2017: DKK 162 million), for a profit margin of 10.8% (2017: 9.8%).
- The European business grew revenue to DKK 995 million (2017: DKK 941 million) and operating profit to DKK 114 million (2017: DKK 106 million), taking the profit margin to 11.4% (2017: 11.3%).
- Hartmann's activities in the Americas generated revenue of DKK 624 million (2017: DKK 702 million) after restatement for hyperinflation. Operating profit grew to DKK 81 million (2017: DKK 78 million), taking the profit margin to 12.3% (2017: 11.1%).
- In addition to hyperinflation, consolidated revenue was impacted by fluctuations in currencies in the amount of DKK -147 million, while operating profit was reduced by DKK 36 million.
- Special items amounted to a net expense of DKK 30 million (2017: DKK 0 million).
Outlook for 2018
- We reiterate our revised guidance, as announced in company announcement no. 14/2018 of 1 October 2018, of revenue of DKK 2.1-2.2 billion after restatement for hyperinflation, a profit margin of about 10% before restatement for hyperinflation and a return on invested capital of about 17% before restatement for hyperinflation. Special items are expected to amount to a net expense of up to DKK 35 million in 2018.
- Our total capital expenditure* is expected to be about DKK 125 million, against the previous forecast of DKK 150 million.
For further information, please contact:
Torben Rosenkrantz-Theil
CEO
Phone: (+45) 45 97 00 57
* Operating profit and profit margin are stated before special items. In addition, on this page, operating profit, profit margin, return on invested capital and total capital expenditure are stated before restatement for hyperinflation, see the section on hyperinflation and implementation of IAS 29 on pages 5-6 in the interim report for Q3 2018.