Continued progress in Hartmann's core business in Q1 2019
Q1 2019 highlights
Continued volume growth and higher premium packaging sales drove an improved core business performance, while overall group results were adversely affected by higher paper and energy prices and the expected reduced contribution from Hartmann Technology. Hartmann maintains its revenue and profit margin guidance for 2019.
- Total revenue came to DKK 596 million (2018: DKK 624 million)
- Revenue from packaging sales increased to DKK 592 million (2018: DKK 555 million), while revenue in Hartmann Technology was DKK 4 million (2018: DKK 69 million)
- The profit margin* was 10.2% (2018: 14.7%)
- Capital expenditure* was DKK 39 million (2018: DKK 11 million)
- Currency movements reduced revenue by DKK 42 million and operating profit* by DKK 5 million
CEO Torben Rosenkrantz-Theil says: "We grew our core business in Q1 2019 on the back of higher packaging sales, an increased proportion of premium products and improved capacity utilisation. The continued progress lays the foundation for additional investments in new production capacity and our production network. We maintain our full-year revenue and profit margin guidance."
Hartmann grew packaging sales in Q1 2019 and lifted its core business performance on the back of volume growth in Europe and North America and stable volume sales in South America.
Higher premium share
Hartmann grew sales of premium packaging and lifted the proportion of total packaging sales accounted for by premium products as well as average selling prices in Q1 2019.
Lower machinery sales
As expected, Hartmann Technology's sales were subdued in the first quarter relative to the exceptionally strong sales reported for the year-earlier period. Sales of machinery and technology are still expected to normalise in 2019 at a level down from the 2018 high.
Stronger production platform
Capacity utilisation at the group's factories improved on the back of continued volume growth, while at the same time Hartmann continued to expand capacity at existing factories and made plans for the establishment of a new factory in Brazil.
Guidance for 2019
Based on continued volume growth in the core business and normalised, lower sales of machinery and technology in Hartmann Technology compared with 2018, Hartmann maintains its 2019 guidance of revenue in the DKK 2.2-2.4 billion range after restatement for hyperinflation.
The profit margin is still expected to be 9-11% before restatement for hyperinflation. Earnings are expected to benefit from efficiency-improving measures and improved capacity utilisation, while the lower contribution from Hartmann Technology, higher paper and energy costs and negative currency effects are expected to have an adverse impact.
Reflecting the decision to establish a new factory in Brazil, capital expenditure is expected to amount to DKK 250 million before restatement for hyperinflation in 2019 against the previous forecast of approximately DKK 200 million.
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* 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.