Annual Report 2008: A good year for Hartmann

The year 2008 was a good year for Hartmann. We completed an extensive
turnaround of the Group, earnings improved significantly, and we
completed a successful rights issue which gave us renewed financial
strength to optimise and develop our activities.
 
Peter Arndrup Poulsen, CEO of Brødrene Hartmann A/S, on 2008:
 
Over the past two years, we have devoted our full efforts to
reversing the trend in the Group's performance - and we have
succeeded. In 2007, we launched an extensive turnaround process,
which was completed by the end of 2008. Hartmann has therefore
already made the adjustments which many businesses are now forced to
make as a consequence of the current economic situation.
 
Hartmann's consolidated earnings improved considerably, and we
reported an operating profit before special items of DKK 91 million,
a substantial increase on the previous year (2007: DKK 53 million).
 
Peter Arndrup Poulsen on the market situation:
 
In our experience, the consumption of eggs does not decrease in times
of crisis. 'Less steak and more omelette' seems to be the reaction,
and we expect that consumers will also follow this pattern in the
current economic situation.
 
Furthermore, a new agenda is becoming increasingly more apparent: a
growing environmental awareness. All other things being equal, this
trend will create more demand for products such as Hartmann's, and we
are striving to exploit this potential as effectively as possible.
 
With respect to the outlook for 2009, Peter Arndrup Poulsen says:
 
Although the demand for Hartmann's products is not adversely affected
by the current economic situation, we are of course not immune to
uncertainty and turbulence. We are sensitive to factors such as
fluctuations in the prices of raw materials and exchange rates. In
2009, we expect the recent movements in exchange rates to adversely
affect our revenue and profit, in particular for our egg packaging
business in Europe. We therefore expect consolidated revenue for 2009
to be slightly lower than in 2008.
 
We expect our EBIT margin for 2009 to be in the region of 5-6%, which
is an improvement on the EBIT margin of 4.4% for 2008, but it also
represents an adjustment in relation to our previous EBIT margin
forecast for 2009 of between 6.0% and 6.7%. This is primarily a
reflection of the negative effects of exchange rate movements, which
are expected to adversely impact our EBIT margin by approximately 2
percentage points.
 
For further information, please contact:
 
Peter Arndrup Poulsen, CEO
 
Tel.: +45 45 97 00 00
Mobile: +45 51 51 40 69
 
ANNUAL REPORT 2008 AT A GLANCE:
 
Revenue and profit
Hartmann generated revenue of DKK 1,491 million for 2008, which was
in line with the 2007 figure. Revenue was on a level with the
expectations announced in the interim report for Q3 2008 of 17
November 2008 (DKK 1,480 million). Revenue was lifted by 7% due to
changes in the product mix and higher prices, and negatively affected
by a decline in volumes by 7%.
 
Operating profit before special items was DKK 91 million, an increase
of DKK 38 million from the year-earlier level (2007: DKK 53 million).
This increase was primarily due to significant profit growth in Egg
Packaging Europe.
 
Operating profit for 2008 was DKK 66 million (2007: a loss of 146
million), up DKK 11 million from the forecast announced in the
interim report for Q3 2008 of DKK 55 million.
 
The Group reported a consolidated loss of DKK 3 million for the year
(2007: a loss of DKK 513 million). This was in line with the guidance
provided in the interim report for Q3 2008.
 
Cash flows and debt
The Group's cash flows reflected the positive impact of the
significant improvement in earnings in 2008, the rights issue and
lower restructuring costs, leading to net proceeds of DKK 252 million
in Q2 2008. Cash flows from operating activities were an inflow of
DKK 101 million in 2008 (2007: an inflow of DKK 56 million).
 
Net interest-bearing debt came to DKK 319 million at 31 December
2008, corresponding to a decrease of DKK 273 million compared with
the previous year (2007: DKK 592 million), due to repayment of debt
in connection with the rights issue.
 
Performance by the individual business areas
Revenue in Egg Packaging Europe increased by 9% to DKK 1,142 million
compared with 2007, which was mainly attributable to an improved
product mix and higher prices. Operating profit before special items
was DKK 118 million, an increase of DKK 49 million from 2007.
 
Revenue in Egg Packaging North America fell by 16% to DKK 123
million, and the business area reported an operating loss before
special items of DKK 27 million, on a level with 2007. The business
area was adversely affected by unfavourable hedging of the CAD/USD
exchange rate.
 
Revenue in Industrial Packaging declined by DKK 94 million, or 43%,
year on year to DKK 126 million, due to declining European sales and
the closing down of industrial packaging operations in Asia and North
America. Operating profit before special items from Industrial
Packaging was DKK 29 million, down DKK 12 million compared with 2007,
mainly reflecting a lower level of activity due to a major customer
phasing out purchases.
 
Outlook for 2009
Hartmann's revenue forecast for 2009 is approximately DKK 1,400
million, down approximately 6% from the preceding year (2008: DKK
1,491 million). This is lower than the forecast provided in the
offering circular of May 2008 of revenue of DKK 1,500 million in 2009
and is mainly due to expected negative effects of exchange rate
movements as a result of unrest in the financial markets. Compared
with the exchange rates hedged for 2008, this represents a negative
effect of approximately DKK 125 million.
 
The Group expects its EBIT margin for 2009 to remain in the region of
5-6%, which is an improvement on the preceding year (2008: 4.4%).
This is lower than the forecast provided in the offering circular of
2008 of an EBIT margin in the region of 6.0-6.7% in 2009, and
primarily reflects the negative effects of exchange rate movements,
which are expected to negatively impact the EBIT margin by
approximately 2 percentage points.
 
This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.