Hartmann lifted revenue and operating profit in the third quarter of 2017 with both the core business and Hartmann Technology contributing to the positive performance. The higher packaging volumes were enabled by the group's new production capacity currently being run in, but the expanded production platform also led to higher production costs and depreciation charges.
In North America, continued low prices of standard eggs temporarily dampened growth in sales of packaging for more expensive premium eggs, and the running-in of new production capacity proceeded at a slower pace than originally expected. Moreover, from the end of the third quarter, Hartmann's operations in a few European markets were adversely affected after fipronil was found in eggs in the summer of 2017. In continuation of these developments, Hartmann on 25 October 2017 adjusted its guidance for 2017 and disclosed its guidance for 2018.
CEO Ulrik Kolding Hartvig: "We did well in the third quarter, boosting packaging sales on the back of our expanded production capacity. Now, we're working full speed to leverage the new capacity in order to maintain momentum in the final quarter of this year and in the next financial year."
Q3 2017
- Revenue was up to DKK 557 million (2016: DKK 482 million), and operating profit came to DKK 69 million (2016: DKK 47 million), for a profit margin of 12.4% (2016: 9.7%). This improvement was driven by higher technology sales and the new production capacity currently being run in.
- The European business grew revenue to DKK 340 million (2016: DKK 282 million) and operating profit to DKK 52 million (2016: DKK 30 million), bringing the profit margin to 15.2% (2016: 10.6%). This performance was driven by higher revenue and earnings from Hartmann Technology's sales and increased packaging sales.
- The business in the Americas grew revenue to DKK 217 million (2016: DKK 200 million) on the back of increased packaging volumes. Affected by lower average selling prices and higher production costs and depreciation charges following the capacity ramp-up, operating profit came to DKK 23 million (2016: DKK 29 million), for a profit margin of 10.5% (2016: 14.4%).
9M 2017
- Revenue totalled DKK 1,643 million (2016: DKK 1,573 million), and operating profit came to DKK 162 million (2016: DKK 190 million), taking the profit margin to 9.8% (2016: 12.0%).
- The European business reported revenue of DKK 941 million (2016: DKK 945 million) and operating profit of DKK 106 million (2016: DKK 114 million), for a profit margin of 11.3% (2016: 12.0%).
- Our operations in the Americas grew revenue to DKK 702 million (2016: DKK 629 million), while operating profit came to DKK 78 million (2016: DKK 103 million), for a profit margin of 11.1% (2016: 16.3%).
- The return on invested capital was 16% (2016: 24%).
Guidance for 2017
- We reiterate our revised guidance of revenue of about DKK 2.2 billion, a profit margin of about 11% and a return on invested capital of about 16%, as announced in company announcement no. 12/2017 of 25 October 2017.
- Our total capital expenditure for 2017 remains at an estimated DKK 200 million.
For further information, please contact:
Ulrik Kolding Hartvig
CEO
Phone: (+45) 45 97 00 57
