Results first half year 2007
10-08-2007 HARTMANN continues profitable growth: The HARTMANN GROUP continued its organic sales growth with an increase of 4.4% in the first six months of 2007. The operating consolidated net income improved by 5.0%, operating EBIT rose by 11.6%. HARTMANN is on a sustainable and profitable growth path.
Growth in all business segments
Organic sales growth of the HARTMANN GROUP was 4.4% in the first six months of 2007. Exchange rate effects impacted sales by 0.3%. Sales revenues were EUR 631.7 million, a 4.1% growth compared to the same period last year.
All three core medical segments saw strong performance, with increase in sales volume of 6.0% and increase in sales of 3.8%.
The Operating Theater Management segment was the key driver of growth with sales volume increasing 13.6% and sales 11.8% to EUR 93.5 million. This positive development is due to two factors: on the one hand HARTMANN was able to better defend the price level in this segment than in the previous year, on the other hand the company achieved strong growth in sales volume with customized surgical sets and gloves.
The HARTMANN GROUP has won the "2007 Growth Strategy Leadership Award" for its growth strategy in the disposable surgical drapes and gowns market. The award from Frost & Sullivan, an international market research and consulting company based in the USA, is presented each year to the company that has demonstrated an exceptional growth strategy within the industry.
In the first six months of 2007, sales volume in the Wound Management segment rose 3.6% and sales 2.1 % to EUR 187.3 million. In Incontinence Management, the segment with the highest sales growth, sales volume increased 4.4% and sales revenues 2.2% to EUR 237.1 million. HARTMANN continued to be exposed to high price pressure in all segments.
The share of the medical core ranges in total sales was 82.0% as of June 30, 2007. Sales revenues for Other Group Activities were EUR 113.8 million, representing a growth of 5.4%. Large contracts for the CMC subsidiary and pleasing sales growth at Kneipp which also belongs to the HARTMANN GROUP were major contributors to this sales increase.
Operating consolidated net income shows qualitative growth
With pleasing sales growth in the first six months of 2007, the HARTMANN GROUP improved its operating consolidated net income more than average by 5.0% compared to the previous year. Operating consolidated net income was EUR 18.4 million. Operating EBIT also increased by 11.6% to EUR 34.1 million.
In the first six months of 2007, consolidated net income and EBIT were influenced differently by extraordinary effects. Provisions for restructuring HARTMANN Pardes GmbH and anticipated tax payments for prior years impacted results negatively. A positive extraordinary effect resulted from write-up of assets at Kneipp. Including extraordinary effects, the consolidated net income decreased 7.6% to EUR 16.2 million.
In contrast, the extraordinary effects had a positive impact on EBIT which increased by 20.2 % to EUR 36.7 million.
Debt further declined
Net debt of the HARTMANN GROUP as of June 30, 2007 was EUR 128.0 million, a reduction of EUR 4.1 million compared to December 31, 2006 (EUR 132.1 million).
Anorganic growth targeted
The profitable organic growth and the continued reduction in debt provide a sound basis for further development of the HARTMANN portfolio. PAUL HARTMANN Pty. Ltd. based in Sydney will be able to strengthen and expand its sales activities across the country by acquisition of two distributors. The incontinence business of the distributors in the states of Victoria und Queensland was acquired on July 1 and August 1, respectively. With these acquisitions, the Australian HARTMANN subsidiary has a market coverage of 95% and thus direct access to almost the entire market. "We are working very intensively on other acquisitions", says Dr. Rinaldo Riguzzi.
Number of employees slightly increased
On June 30, 2007 the HARTMANN GROUP had 8,818 employees, an increase of 66 employees compared to the end of 2006. This change is mainly due to capacity expansions in the facility in Qingdao, China, and at Kneipp. 62.2% of employees worked in subsidiaries outside Germany on June 30, 2007.
Outlook
Despite the continued difficult market environment, the HARTMANN GROUP expects sustained growth in the core medical ranges also for the second half of the year. In addition, the company anticipates sales growth in Other Group Activities. Taking into account higher profitability in the core segments Wound Management, Incontinence Management and Operating Theater Management as well as improved results of the German subsidiaries Sanimed and CMC in the Other Group Activities segment, HARTMANN expects further improvement in operating consolidated net income for the current fiscal year.
