Peter Arndrup Poulsen, CEO of Brødrene Hartmann as of 1 October 2006, makes the following statements about the year in general:
"2006 was not a satisfactory year for Hartmann. Revenue went up by 4%, but operations were adversely affected by production difficulties and replacements in group management. Earnings were on a par with the announced expectations, but that was mainly because we sold our head office."
"We have already made several important decisions, for instance we have decided to divest unprofitable operations. Building upon the changes made to our organisation, the establishment of a link between sales and production, the expansion of the production plant in Hungary and the rightsizing of our product and customer portfolio we will create a basis for stabilised earnings."
The coming financial year according to Peter Arndrup Poulsen:
"Our task in 2007 will be to bring the business 'forward to basics'. In the recent years we have demonstrated a decent growth in revenue, product portfolio and in the markets, but we have failed in following the success through in production. 2007 will be a year of consolidation, where we focus more on the bottom line than on the top line."
Group:
Revenue came to DKK 1,475 million, reflecting growth of 4% (DKK 60 million) from the year-earlier level.
Operating profit came to DKK 62 million against DKK 53 million in 2005. Adjusted for a number of non-recurring items the amount in operating profit came to DKK 17 million, reflecting a decline of DKK 36 million from the year-earlier level. The amount reflects a shortfall of approx. DKK 20-40 million compared to the level announced in the Annual Report 2005, and this is not satisfactory.
The Group posted a consolidated net loss of DKK 77 million against the original expectations of DKK 5-15 million announced in the Annual Report 2005. The amount reflects the adverse effect of the write-downs relating to South America.
The operations in South America were put up for sale in 2006, and the sales process is still ongoing. The operations are recognised in the accounts as discontinued activities and affect only the amount in consolidated profit/(loss).
Divisions:
Egg & Fruit Packaging Europe posted DKK 1,037 million in revenue, up 5%. The amount in operating profit came to DKK 78 million, resulting in a decline in EBIT margin from 11.3% in 2005 to 7.6% in 2006. This is unsatisfactory and was attributable primarily to production difficulties.
Egg & Fruit Packaging North America posted DKK 153 million in revenue, reflecting an increase of 9%. Operating loss came to DKK 46 million, reflecting a marginal improvement of DKK 6 million from last year. The business in North America is much better prepared for the future than it was one year ago, but the risks in North America are still deemed to be considerable.
Industrial Packaging achieved DKK 203 million in revenue, up 10%. Operating profit came to DKK 9 million, reflecting a decline of DKK 11 million from last year. Although not unexpected, this development is unsatisfactory and was caused primarily by production difficulties.
Outlook:
The Group expects 2007 to be a year of consolidation. Revenue in 2007 is forecast in the range of DKK 1,500 million, with an operating profit of approx. DKK 40-50 million and a profit after tax of DKK 10-20 million.
Work has begun to initiate further strategic initiatives for announcement in the second half of 2007. The forecast does not take account of any costs associated with these initiatives.
The Annual Report 2006 and statements by the Management are available on www.hartmann.dk
For further information please contact Peter Arndrup Poulsen, CEO.
