INFORM INFORMATION FOR OUR SHAREHOLDERS FOR THE FIRST QUARTER OF 2022
THE HARTMANN GROUP AT A GLANCE CONTENTS OVERVIEW The HARTMANN GROUP at a glance 2 To our shareholders 3 Business development 4 The HARTMANN share 6 Russian-Ukrainian war 7 Additional updates 9 Data protection information 11 Imprint 12 The HARTMANN GROUP is one of the leading European providers of professional medical and care products and associated services. Every day, healthcare professionals and patients rely on HARTMANN brands in the segments of Incontinence Management (e.g. MoliCare®), Wound Care (e.g. Zetuvit®) and Infection Management (e. g. Sterillium®). This is expressed in our brand promise of “Helps. Cares. Protects.”. Founded in 1818, the company sells with its products and solutions in 130 countries around the world. For the future, the HARTMANN GROUP is currently implementing its strategic Transformation Program with its high-performance, customer-oriented and passionate team. Would you like to stay up-to-date on HARTMANN? Follow us at www.hartmann.info, on LinkedIn or Facebook. Change over previous year 2021 2022 absolutely in % Sales revenues 593.3 560.8 −32.5 −5.5 of which foreign share in % 65.4 67.9 Organic sales growth in % 2.0 −6.1 Adjusted EBITDA 82.6 53.5 −29.1 −35.3 Return on adjusted EBITDA in % 13.9 9.5 Equity ratio in % 58.1 62.5 4.4 %-Pt. Net financial position 85.3 36.0 −49.3 −57.8 KEY PERFORMANCE INDICATORS OF THE HARTMANN GROUP AS OF MARCH 31 iin EUR million, rounding differences not balanced out Title: In the first quarter of 2022, material costs, among other things, increased significantly. Pictured: cellulose rolls for the production of incontinence products 2 Inform first quarter 2022 | The HARTMANN GROUP at a glance
In the first quarter of 2022, the coronavirus no longer significantly influenced HARTMANN’s business performance for the first time since the beginning of the pandemic. No positive effects materialized as a result of the extraordinary economic situation caused by the pandemic. The markets normalized, albeit at a reduced level compared to the growth trend prior to the coronavirus outbreak. The main factors influencing the first three months included the rising costs of materials, transportation, and energy, which had already been on the rise since last year. The outbreak of the Russian-Ukrainian war increased these costs massively once again. To offset some of the significantly higher costs, HARTMANN has announced necessary price increases in most product categories and markets. Ensuring the stability of supply chains to our customers requires a great deal of attention. In parallel, the Transformation Program will be continued. HARTMANN GROUP sales revenues for Q1 2022 were at EUR 560.8 million, representing a moderate organic sales decline of −6.1% compared to the same period of the previous year. Adjusted EBITDA was at EUR 53.5 million in Q1 2022, a decrease of EUR −29.1 million compared to the corresponding period in 2021. Overall, HARTMANN’s quarterly figures are in line with expectations. Depending on the course of the Russian-Ukrainian war, HARTMANN has calculated possible scenarios with corresponding countermeasures and varying effects on business development. The most likely scenario confirms the outlook published in the 2021 Annual Report with a moderate organic decline in sales and a declining adjusted EBITDA of EUR 190 to 230 million. On the following pages, we will provide you with detailed information on our key financial figures, while also addressing topics that concern us at HARTMANN: the Russia-Ukraine war, sustainability and – as in previous reports – the coronavirus pandemic. Kind regards and take care! Britta Fünfstück
Cost increases have a significant impact on business performance In Q1 2022, HARTMANN’s business performance was no longer significantly influenced by the coronavirus pandemic, but rather by the sharp rise in material, transportation, and energy costs worldwide. Across all business segments, the Company generated sales revenues of EUR 560.8 million in the first three months. This represents a moderate organic decline in sales of −6.1% compared to the same period of the previous year. Positive effects of the extraordinary economic conditions related to the pandemic failed to materialize in the first quarter and the markets gradually returned to normal, albeit at a reduced level compared to the growth trend prior to the coronavirus outbreak. At the same time, significant cost increases became the main factor influencing performance. Material, transportation, and energy costs have already increased significantly in 2021. The outbreak of the Russian-Ukrainian war further accelerated this trend. A key management task in the first quarter was to ensure the security of supply of our products and services for customers and patients. In addition to necessary price adjustments, the Company is continuing to systematically implement its Transformation Program, which also focuses on cost reductions. Market normalizes at reduced level In the Wound Care segment, HARTMANN generated sales of EUR 125.8 million in the first three months of the year. This figure corresponds to an organic sales increase of 12.3% compared to Q1 2021. Contributing to this development was increased demand for traditional wound management products, as well as successful sales developments in the area of modern wound care, including superabsorbent and silicone-coated products. In the Incontinence Management segment, sales in the first three months of the year amounted to EUR 171.7 million. This corresponds to an organic increase in sales of 1.3% compared to the figure for the same quarter of the previous year. The slow return to normal bed occupancy rates in nursing and care facilities is contributing to a gradual recovery to pre-pandemic levels. The segment’s growth drivers in the first quarter included not only sanitary pads and gender-specific pants, but also skin care products. At the same time, the segment was subject to the significantly negative effects of increased material, transportation, and energy costs. HARTMANN countered these by adjusting prices and introducing measures to increase efficiency and control costs. BUSINESS DEVELOPMENT IN THE FIRST QUARTER OF 2022 The Infection Management segment recorded sales of EUR 148.1 million in the period under review, representing an organic decline in sales of −28.0% compared to the first quarter of 2021. The decline is primarily attributable to the disappearance of positive contributions resulting from the extraordinary coronavirus-related boom in demand for masks and gloves. Growth in products such as drapes and sets for operating rooms was unable to offset this development. The Complementary Group Divisions segment generated sales of EUR 115.3 million. This corresponds to organic sales growth of 4.4% compared to the first quarter of 2021. At the CMC Group, the positive sales development with baby care and absorbent cotton products led in particular to an increase compared to the prior-year quarter. The KOB Group also achieved year-on-year sales growth with increases in all product categories, particularly compression bandages. At the KNEIPP Group, on the other hand, a currently declining market led to a noticeable drop in sales. Further decline in sales in Europe In the core sales market of Germany, there was an organic decline in sales of −13.0% in the first quarter as compared with the same period of the previous year. In the Europe, Middle East and Africa economic region (EMEA, excluding Germany), organic sales declined by −3.0%. In the Asia-Pacific region (APAC), HARTMANN recorded organic sales growth of 2.3%. In the Americas region, organic sales development remained stable. SHARE OF TOTAL SALES BY BUSINESS SEGMENT in EUR million and percent 125.8 | 22.4% 115.3 | 20.6% 171.7 | 30.6% 148.1 | 26.4% Wound Care Complementary Group Divisions Incontinence Management Infection Management 4 Inform first quarter 2022 | Business development
Rising costs impact earnings In Q1 2022, adjusted EBITDA amounts to EUR 53.5 million. Compared to the same period of the previous year, this corresponds to a decrease of EUR −29.1 million. The EBITDA margin is 9.5%. In addition to the decline in sales, the main reasons for this development are the sharp increase in material, transportation, and energy costs. Higher equity ratio At the end of Q1 2022, HARTMANN’s equity ratio was 62.5%, 4.4 percentage points higher than the prior-year figure of 58.1%. The net financial position was EUR 36.0 million, down from EUR 80.6 million as of 31 December 2021, due to increased capital primarily tied up in inventories that were expanded to secure customer supply chains. Stable number of employees As of 31 March 31 2022, the HARTMANN GROUP employed 10,544 people worldwide. This figure is slightly lower than the number of employees at the end of financial year 2021, with a decrease of −0.8%. This is mainly due to a decrease in employees at KOB in India. SHARE OF TOTAL SALES BY REGION in EUR million and percent 179.9 | 32.1% 33.6 | 6.0% 330.5 | 58.9% 16.8 | 3.0% Germany APAC EMEA (excl. Germany) Americas NUMBER OF EMPLOYEES IN THE HARTMANN GROUP 5,281 923 5,260 4,375 972 31.03.2022 31.12.2021 Germany Europe excluding Germany Outside Europe 10,628 10,544 Employees 4,361 Outlook Due to the unclear development of the Russian-Ukrainian war, material, transportation, and energy costs, as well as due to the coronavirus pandemic, the outlook for financial year 2022 is subject to a high degree of variability. HARTMANN is actively managing this situation. Depending on the continuation of the Russian-Ukrainian war, the Company has worked out possible scenarios with corresponding countermeasures and varying effects on business development. The most likely scenario confirms the current outlook for financial year 2022 with a moderate organic decline in sales and a declining adjusted EBITDA of EUR 190 to 230 million. Furthermore, against the backdrop of international crises relating to the coronavirus pandemic, HARTMANN will consistently continue with its implementation of the Transformation Program in the coming months. In view of the enormous challenges, this will make a significant contribution to increasing the competitiveness and securing a leading market position in the core segments in Europe. 5 Inform first quarter 2022 | Business development
BASIC INFORMATION ON THE HARTMANN SHARE WKN 747404 ISIN DE0007474041 Exchange Frankfurt Stock Exchange Segment Open Market Type of share Registered shares held in collective custody Capital stock EUR 91.3 million Number of shares 3,572,424 units, of which 20,682 units are held as own shares THE HARTMANN SHARE Performance of the HARTMANN share The closing price of the HARTMANN share on the Frankfurt Stock Exchange at the end of March 2022 was EUR 336 per share, EUR 1 lower than the year-end price for 2021 (EUR 337). HARTMANN Shareholder Portal: Take advantage of the online service for shareholders The Shareholder Portal offers a variety of services and functions for shareholders, who can register for electronic quarterly reports and an electronic invitation to the Annual General Meeting. Shareholders can easily register online in advance of the next PAUL HARTMANN AG Annual General Meeting using the Shareholder Portal, and thereby make a contribution to protecting the environment by avoiding the shipment of a paper copy. Shareholders can also quickly review their contact details and shareholdings in the Shareholder Portal. We look forward to you! www.hartmann.de/portal DEVELOPMENT OF THE HARTMANN SHARE COMPARED TO EURO STOXX 50 Monthly closing prices indexed, 31 March 2021 (= 100 percent) to 31 March 2022 PAUL HARTMANN AG (Frankfurt) EURO STOXX 50 2021 2022 April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March 130 120 110 100 90 80 80 90 100 110 120 130 March 31, 2022 EUR 336.00 EUR 380.00 March 31, 2021 6 Inform first quarter 2022 | The HARTMANN share
RUSSIAN-UKRAINIAN WAR: HARTMANN TAKES INITIATIVE AND HELPS THOSE AFFECTED Immediate aid for relief organizations Immediately after the war began, HARTMANN established a working group to coordinate relief efforts. As late as February, the Company provided immediate aid in the form of cash and in-kind donations, including to the German Red Cross and the emergency and disaster relief organization humedica e.V. In total, the shipments comprised over 200 pallets, mainly with relief supplies for wound care, surgical procedures, and incontinence. The donated goods were delivered directly to the regions affected by the crisis and the arrival of refugees. Help for relatives Even before the war began, HARTMANN Czech Republic had around 300 Ukrainian employees who all had family members in Ukraine. More than 150 relatives have fled to the Czech Republic since February. HARTMANN is not only helping the refugees with food, clothing, and medicine. The Company also supports them in dealing with authorities and finding accommodation. In addition, HARTMANN has provided almost 60 jobs in production for the refugees at the Veverská Bítýška site. The offer is currently being supplemented by further jobs in administration and production. HARTMANN condemns any aggression that endangers the lives and health of people. The Company immediately made substantial donations in cash and in kind to aid organizations and supported numerous aid shipments. HARTMANN and its employees also gave great support to our 300 Ukrainian colleagues in the Czech Republic. They have been directly affected by the war and their families have fled. In addition to donations in cash and kind, family members who had fled received help in dealing with authorities, getting jobs and finding housing. In recent years, HARTMANN has always shown strength and responsibility in times of crisis. Also in the current situation, it is clear that the Company is taking the initiative.
HARTMANN employees also show great willingness to help In parallel to the Company’s extensive aid activities, HARTMANN employees also joined forces and showed great initiative. In Switzerland, Germany, and the Czech Republic, they donated salaries, overtime, and vacation days as part of various campaigns. Within a very short time, almost 80,000 euros were collected. The money will benefit Ukrainian families who have fled at the HARTMANN site in Veverská Bítýška in the Czech Republic. Medical supplies for Russia HARTMANN is also present in Russia with a site in Moscow. The UN Human Rights Charter classifies healthcare as a fundamental right, which is why medical products are exempt from sanctions and embargoes. Like many internationally active healthcare companies, HARTMANN considers itself obligated to ensure the availability of medical products for Russia as well, thus fulfilling its responsibility to local patients. Against this background, HARTMANN has decided to maintain the production of wound care products in Russia. HARTMANN has adjusted the product portfolio exported to Russia and currently supplies the Russian market exclusively with products for medical use. Local marketing measures as well as investment projects have been stopped. Emergency aid: HARTMANN donated more than 200 pallets of relief supplies to those affected by the Russian-Ukrainian war throughout the Group. In view of the humanitarian catastrophe in Ukraine, we as a company are very proud of the enormous willingness to help and the solidarity of our employees at the various locations. Britta Fünfstück, CEO of the HARTMANN GROUP 8 Inform first quarter 2022 | Russian-Ukrainian war
Environmentally friendly products: HARTMANN develops intelligent product design and sustainable packaging HARTMANN works continuously to improve the sustainability of its products. In the process, the Company focuses on intelligent product design, sustainable materials, optimized packaging, and the avoidance of waste. Sustainable materials The Company uses cardboard packaging made from recycled fibers in many areas. At sites with a large amount of woodbased materials, HARTMANN has implemented appropriate supply chain certifications, such as FSC® Chain-of-Custody certification (FSC® C131245). Cellulose and other pulp fibers account for the largest share of rawmaterials used by HARTMANN. The Company sources the pulp for incontinence products mainly from certified forests in North America and Scandinavia. All pulp is bleached without any chlorine gas. This reduces the amount of absorbable organic halogens (AOX) in wastewater. The subsidiaries have also implemented numerous sustainability measures with regard to raw materials and ingredients. The shower products and hand soaps produced by KNEIPP consist of 98% biodegradable ingredients. In addition, KNEIPP is continuously optimizing its packaging concepts, relying among other things on natural paper alternatives without fresh wood fibers. By the end of the year, these will be used for all outer packaging. From the end of the coming year, all packaging is to be fully recyclable, and by 2025 KNEIPP aims to replace all plastic packaging, including recycled plastics, with more sustainable alternatives. The initial successes of this strategy are already quantifiable: Compared to 2018, KNEIPP cut the plastics in its packaging by a good quarter last year. KOB offers latex-free cohesive fixation bandages as well as compression and support bandages with a high natural fiber content. The company also predominantly uses folding cartons and shipping boxes made of 100% recycled material, as well as occasional packaging made of certified, renewable raw materials. CMC manufactures biodegradable cotton swabs with environmentally friendly paper shafts and packaging, offers cotton pads in PE bags with recycled content, and packages the majority of its retail medical products in paper packaging. Waste avoidance and material savings HARTMANN is pushing ahead with various measures to conserve materials and avoid waste. In the Infection Management segment, for example, the Company continuously reviews and optimizes the use of materials and packaging concepts. In the case of surgical drapes, changes in design ensure optimized material use and thus improved transport, storage, and sterilization conditions. In the production of disinfection wipes Mikrobac® Tissues, HARTMANN has already been relying on the use of a concentrate in manufacturing since 2017, which leads to savings of more than 80% in transportation costs. In addition, HARTMANN has succeeded in reducing the empty volume of the 750-ml bottle of the disinfectant Bacillol® 30 Sensitive Foam by 30 cm3 , thus reducing material expenses. In the Incontinence Management segment, HARTMANN also reduced the packaging volume and thus the space required for road transport and storage with optimized products. The optimization of packaging for MoliCare® Bed Mats was successfully launched on the market in 2020 and ensured a savings of 20,000 pallets in the storage and transportation capacities required for this last year alone. HARTMANN will extend this optimization program to other incontinence ranges in the future. Further information on sustainability at HARTMANN can be found in the Sustainability Report 2021 and at hartmann.de/ sustainability. Starting from the end of the coming year, all KNEIPP packaging is planned to be completely recyclable. ADDITIONAL UPDATES 9 Inform first quarter 2022 | Additional updates
Getting through the pandemic safely: employee protection remains top priority HARTMANN employs more than 10,500 people. The health of all employees, in addition to ensuring the security of supply as an essential supplier to healthcare systems, has been a particularly high priority since the beginning of the coronavirus pandemic. In view of the high numbers of infections, the Company decided to extend its coronavirus regulations for a transitional period after the government stopped requiring workers to provide certificates of vaccination, recovery or a daily negative test result in March of the current year. The measures include masking, social distancing, and hygiene rules, along with reduced office occupancy. Expanded vaccine program As early as December 2021, HARTMANN expanded its existing in-house coronavirus vaccination program in Germany to include vaccinations with mRNA vaccines from Biontech and Moderna. Since March 2022, the Company has also been offering the new Novavax coronavirus vaccine to previously unvaccinated employees. Back to normal Right at the start of the coronavirus pandemic, HARTMANN set up a global task force. It is responsible for the ongoing analysis and management of numerous pandemic-related measures. The task force is now guiding the Company on its gradual return back to normal. The focus remains on the protection of all employees, constantly ensuring supply chain security and safeguarding production at all sites. Coronavirus vaccinations at HARTMANN – now possible with the new active ingredient from Novavax since March 2022. 10 Inform first quarter 2022 | Additional updates
Data protection information: quarterly information and annual report of the HARTMANN GROUP 1) Purposes of data processing and legal bases We automatically send you, the shareholders of the PAUL HARTMANN AG, various information to inform you about the performance of the HARTMANN GROUP and current market developments. This information includes, in particular, financial information, for example, the sending of quarterly information (particularly our shareholder magazine “Inform”) and, where you have asked for this to be sent by post, the HARTMANN GROUP’s Annual Report. At the same time, an online version of the quarterly information is available to you on our website www.hartmann.de/ir_en under the “Downloads” menu option and in the shareholder portal. Should you no longer wish to receive the quarterly information and/or the annual report, or if you wish to receive it exclusively electronically, in future, please contact PAUL HARTMANN AG, Investor Relations, P.O. Box 1420, 89504 Heidenheim or via e-mail ir@hartmann.info. To send you the information and if applicable the annual report, PAUL HARTMANN AG processes your personal data (surname and first name, address, where relevant, shareholder number), in each case based on legitimate interests (Art. 6(1) sentence 1 letter f) GDPR). 2) Recipients of personal data Where you do not provide us with your personal data yourself, we normally receive this via your custodian bank. The service providers engaged by us for these purposes process your personal data exclusively according to our instructions and only to the extent this is necessary for the performance of the requested service. All PAUL HARTMANN AG employees and those of our contracted service providers who have access to your personal data and/or process this, are obliged to treat that data as confidential. 3) Deletion of personal data We delete your personal data in accordance with the statutory regulations. We process your personal data as long as there is a corresponding legal basis for doing so. The aforementioned information on deletion does not apply if, among other things, legally required retention periods prevent immediate deletion. 4) Your data protection rights Among the legal requirements, you have the right to receive information about your processed data, to request their rectification or deletion or the restriction of processing. In addition, you have a right of objection and a right of appeal to the supervisory authority. Among the legal requirements, you may object to the processing of your personal data for the aforementioned purposes at any time without stating reasons. 5) Responsible party and contact information Todo so, please contact PAULHARTMANNAG, Investor Relations, P.O. Box 1420, 89504 Heidenheim or via e-mail ir@hartmann.info. For comments and queries about the processing of personal data, our data protection officer can be reached at: PAUL HARTMANN AG, Data Protection Officer, Paul-Hartmann-Strasse 12, 89522 Heidenheim, datenschutz@hartmann.info. For further data protection information, please see our website at https://www.hartmann.info/en-corp/ data-protection 11 Inform first quarter 2022 | Data protection information
Imprint Publisher PAUL HARTMANN AG P.O. Box 1420 89504 Heidenheim Germany Investor Relations: Monika Faber Phone +49 7321 36-1105 E-Mail: ir@hartmann.info Public Relations: Stephanie Reuter (V.i.S.d.P.) Phone +49 7321 36-1393 E-Mail: presse@hartmann.info Status as of 29 April 2022 This report contains forward-looking statements. Actual results may be different from the ones implied by the forward-looking statements. Rounding discrepancies not balanced out Investor Relations www.hartmann.de/ir_en News from the HARTMANN GROUP www.hartmann.de/press PAUL HARTMANN AG I P.O. Box 1420 I 89504 Heidenheim I Germany
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