The HARTMANN GROUP, an internationally leading medical device company.
Key figures

The HARTMANN
GROUP, an
internationally leading
medical device
company.

HARTMANN at a glance

We have offices in 36 countries around the world, but our products are available in over 130 countries through a network of distributors.

The HARTMANN GROUP is one of Europe’s leading providers of professional medical and care products and associated services.

In a world where health is becoming an increasingly important matter and is managed more professionally, we offer our customers simple and effective solutions for the benefit of the patients. We are ambitious and constantly looking for ways to improve outcomes in both the professional sector and at home. This is expressed in our brand promise of “Helps. Cares. Protects”. Our core portfolio is augmented by consumer-based medical ranges, along with care products and cosmetics.

In 2021, we employed 10,628 staff worldwide and generated sales of EUR 2,3 billion.

The HARTMANN solutions

In compliance with internal controlling, the activities of the HARTMANN GROUP are reported in business segments. They are broken down into the focus areas of Wound Care, Incontinence Management, Infection Management and Complementary Divisions of the Group, primarily including the businesses of KNEIPP, CMC and KOB.

The Wound Care segment achieved sales of EUR 492.4 million during the 2021 financial year and with that organic growth of 9.7% compared with the previous year. Following the pandemic related downturn of the previous year, a gradual increase in the number of operations, doctors’ appointments and pharmacy visits could be detected in 2021, particularly in the second half of the year. However, these have not yet reached the prepandemic level. The growth in sales was driven primarily by double-digit growth rates in modern wound care products. The main drivers were the super-absorbent and silicone-coated product ranges. Good performance by traditional wound care products and the Vivano® negative pressure wound therapy products also contributed to the growth in sales. As a result of its recovery and the consequently significantly higher sales base compared with the previous year, the Wound Care segment increased its adjusted EBITDA by EUR 27.2 million to EUR 87.4 million.

In the Incontinence Management segment, sales revenues were below those of the previous year at EUR 681.1 million. At -1.8%, organic sales performance was slightly down. The reasons for this performance were, on the one hand, the ongoing low occupancy rates in medical facilities, the associated moderate demand for incontinence products and the departure from unprofitable business areas. On the other hand, the segment recorded double-digit growth rates in elastic slips and gender-specific pants and also performed positively in the area of skincare products. At EUR 76.6 million, the adjusted EBITDA in the Incontinence Management segment during the reporting year was EUR 23.5 million above the previous year’s level. This significant increase is mainly based on the modernization and optimization of production facilities and a more profitable mix of products and
customers.

The Infection Management segment recorded sales of EUR 681.3 million. This represents a serious organic decline in sales of -19.3%. This was caused by a gradual shift away from the corona-related special economic circumstances in 2020. In the context of high levels of stock held by customers, the demand for hand sanitizers and surface disinfectants fell, as it did for personal protective equipment. Only examination gloves experienced peaks in sales. Demand has also risen for other items in the range, such as surgical wipes and kits. The anticipated end of the positive volume effects as compared to the previous year and the high costs of materials and freight were the main reasons for the adjusted EBITDA in the Infection Management segment to decline by EUR 101.5 million to EUR 45.5 million.

Sales revenues in the Complementary Group Divisions segment stood at EUR 447.0 million in 2021. This equates to an organic growth in sales of 0.8%. The KNEIPP Group also made a significant positive contribution to sales growth this year. KNEIPP continues to successfully benefit from the trend towards greater health awareness. This is reflected in the level of customer acceptance in the international sales markets, which continues to grow. While the pandemic had a negative impact on demand for cosmetics and hence on CMC Group sales, the KOB Group showed recorded positive sales performance compared with the previous year. This is primarily thanks to the strong growth in compression dressings and in the BRAWO® SYSTEMS trenchless drainage system for wastewater pipes. Adjusted EBITDA in the Complementary Group Divisions segment remained virtually unchanged at EUR 31 million.

In its core sales market of Germany, the HARTMANN GROUP achieved sales revenues of EUR 778.4 million during the 2021 financial year. The impact of the coronavirus contributed to an organic -9% decline in sales. In the EMEA region (Europe minus Germany, the Middle East and Africa) sales revenues stood at EUR 1,325.8 million. This equates to a moderate organic decline of -5.5%. Sales revenues in the APAC region (Asia and the Pacific Region) stood at EUR 133.5 million during the reporting year and hence enjoyed organic growth of 13.9% compared with the previous year. In the Americas, HARTMANN recorded a strong organic upturn in sales of 17.4% to EUR 64.0 million.

In the 2021 financial year, the ratio of domestic to foreign sales revenue at HARTMANN moved slightly in favor of foreign sales: Germany accounted for EUR 778.4 million or 33.8% of Group sales (previous year: 35.0%) while sales abroad made up 66.2% (EUR 1,523.3 million).

As a result of the coronavirus pandemic and interruptions in global supply chains, world market prices for the raw materials of concern to HARTMANN increased significantly during the reporting year. Cellulose is the raw material the Company purchases in the greatest volume. The price for fluff pulp rose continuously until May 2021 and then remained high pending a slight fall in August, ending the year at USD 1,640/mt. At the end of the year, the rate was USD 475 above the previous year’s rate of USD 1,165/mt. This equates to an increase of 40.8%. The much higher average prices compared with the previous year had an adverse impact on the costs of materials. The prices for key polymers, such as polyethylene and polypropylene, increased considerably in 2021 and ended the year very high. A somewhat weaker US dollar compared with the previous year’s average reduced the overall negative effects for the HARTMANN GROUP.

Performance indicators

During the reporting year, the global pandemic again had a significant impact on the business performance of the HARTMANN GROUP. As a leading provider of system solutions for the medical and healthcare sectors, HARTMANN is using its Transformation Program to address the challenges and opportunities in the healthcare market.

The earnings position was impacted by the end of the coronarelated special economic circumstances in disinfectants and personal protective equipment. What remains is a market reduced by the pandemic with continued low bed occupancy rates at medical facilities and only a gradual increase in elective surgeries, doctors’ appointments and pharmacy visits. Added to that are significant increases in material and transport costs. The strategic Transformation Program, on the other hand, has been shown to have a positive impact on Group results.

In order to manage the growth in sales revenues and for the purpose of transparent communication, HARTMANN uses organic sales growth as its central sales performance metric. Overall, the HARTMANN GROUP recorded a moderate organic decline in sales, of -5.2% during the reporting year. This is consistent with expectations for 2021.

Including all business segments, the HARTMANN GROUP reported Group sales of EUR 2,301.8 million in 2021. Compared with the previous year, this equates to a moderate decline of -5.4%. Here, acquisitions/divestments, as well as the exchange rate effect, in each case at -0.1%, had a slightly negative impact on the HARTMANN GROUP’s overall growth.

The HARTMANN GROUP is making significant investments as part of the Transformation Program launched in 2019. In this context, adjusted EBITDA has been the key metric for the HARTMANN GROUP’s earnings performance since 2020. This valuation metric shows EBIT before depreciation of tangible assets, amortization of intangible assets, impairments/recoveries, and adjustments to operating results, and hence reflects operating performance. The adjustments to the results cover restructuring costs, profits or losses from divestments and acquisition-related spending, as well as other adjustments. Adjusted EBITDA in 2021 amounted to EUR 240.6 million compared with EUR 292.4 million the previous year, and was therefore within the range anticipated in the Outlook published in the 2020 Annual Report. The adjusted EBITDA return fell from 12.0% in 2020 to 10.5% in the reporting year.

During the 2021 financial year, HARTMANN made adjustments to its operating results. Restructuring costs of EUR 12 million were incurred as part of the focus on strategy, largely through the relocation of the wound treatment production facility to Poland. These costs were set against revenues under other adjustments of EUR 4.3 million, which largely arose due to additional sales connected with the pandemic. This meant the HARTMANN GROUP’s EBITDA stood at EUR 232.9 million. The HARTMANN GROUP’s financial result improved from EUR -3.4 million in 2020 to EUR -0.2 million in 2021. Income tax liabilities during the reporting period came to EUR 38.1 million, whereas in 2020 they had been EUR 46.9 million. The tax ratio fell by about 1.1% compared with the previous year. Consolidated net income fell by EUR 15.8 million from the previous year to EUR 97.1 million.

in EUR thousand20202021Change compared to prior year in %
Earnings
Sales revenues2,433,036
2,301,769– 5.4
Of which outside Germany in %65.066.21.2 *
Consolidated net income112,94097,098– 14.0
Net return on sales in % 4.64.2– 0,4 *
Cost of materials1,063,8021,012,946– 4.8
Personnel expense606,443613,4511.2
Adjusted EBITDA292,427 240,558
– 17.7
Return on adjusted EBITDA in %12.010.5– 1.5 *
Depreciation/amortization on tangible and intangible assets145,646
97,506
– 33.1
EBIT163,277135,389– 17.1
Return on EBIT in %6.75.9– 0.8 *
Cash-Flow274,615175,687– 36.0
Free-Cash-Flow203,215
– 46,340
– 122.8
Balance Sheet
Balance sheet total1,730,5161,825,0475.5
Non-current assets734,061
835,567
13.8
Investments in tangible and intangible assets 1)134,210
154,177
14.9
Current assets996,455989,480– 0.7
Equity capital and reserves973,330 1,092,99512.3
Equity/asset ratio in %56.259.9
3.7 *
Return on equity in %11.68.9– 2.7 *
Net Financial Status186,585
80,557– 56.8
Employees as at Dec. 31 2)10,62510,6280.03

* Change in percentage points

1) Excluding investments from acquisitions such as goodwill

2) Excluding staff on parental leave and PAUL HARTMANN AG Management Board members

In the 2019 financial year, the HARTMANN GROUP was again able to increase sales in all segments despite more challenging market conditions. As expected, there was moderate growth in sales of 3.2% to EUR 2,186.8 million. At the same time, the above-average growth in the Wound Management and Other Group Activities segments had a positive impact. Exchange rates, divestments and acquisitions had only minor effects during the reporting year, so organic growth stood at 2.8%.

In 2019, the HARTMANN GROUP's EBIT stood at EUR 104.4 million, compared with previous year EUR 123.2 million. This equates to a return on EBIT of 4.8%, after 5.8% the previous year. This performance results largely from non-operative measures to focus portfolios, particularly in relation to the SANIMED Group and the discontinuation of unprofitable business with customized full kits in Australia. In addition, regulatory costs associated with implementation of the new EU Medical Devices Regulation (MDR) also impacted the results during the reporting year negatively.

Through a multi-year transformation program launched during the 2019 financial year, HARTMANN is promoting sustainable profitability and organic growth in the strategic product groups and customer segments. The agreement made at the end of 2019 to sell the SANIMED Group stems from this focusing of the HARTMANN GROUP. As a result of this decision, the assets and liabilities held for sale were required, under IFRS 5, to be disclosed separately on the balance sheet and the SANIMED Group's longterm assets had to be revalued, which led to an impairment of EUR 9.5 million in EBIT. The financial result came to EUR -6.3 million, compared with EUR -2.5 million the previous year. This deterioration is attributable to the interest-rate effect from the first-time application of the IFRS 16 accounting standard and the associated recognition of lease liabilities. The income tax expenses came to EUR 35.1 million compared with EUR 36.9 million the previous year. The 5.2-percentage-point higher tax ratio of 35.8% is largely influenced by non-tax-effective impairments in connection with the valuation of the SANIMED Group under IFRS 5. The consolidated net income fell compared with the previous year by 20.8% to EUR 62.9 million.