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Hartmann 2Q 2014 results: operating profit down 19% from year ago to DKK 17 million



GENTOFTE, Denmark , Aug. 21, 2014 (Press Release) - 

In Q2 2014, Hartmann continued to grow sales of premium products to customers in both Europe and North America. The higher average selling price partly offset the considerable adverse impact of currency fluctuations and expected costs related to the expansion in North America. We maintain our guidance for full-year revenue of DKK 1.6-1.7 billion and a profit margin of 9.0-10.5%. CEO Ulrik Kolding Hartvig says: "Developments in Europe were stable in Q2, and in North America we continued to increase the share of premium products. Yet, results in our North American business were restrained by exchange rates and, as expected, by the ongoing production expansion." "We will see the effects of our investment in North America already in the second half-year, and in Europe we expect continued results progress. With the initiatives we have accomplished, we are establishing capacity for growth across our markets." Q2 2014 Total revenue came to DKK 351 million (2013: DKK 370 million) with operating profit* at DKK 17 million (2013: DKK 21 million), corresponding to a profit margin* of 4.9% (2013: 5.7%). Exchange rate fluctuations impacted negatively on revenue by DKK 15 million and operating profit by DKK 6 million. In Europe, revenue came to DKK 281 million (2013: DKK 296 million) with operating profit at DKK 12 million (2013: DKK 10 million), corresponding to a profit margin of 4.1% (2013: 3.5%). We continued to grow earnings through increasing the proportion of premium products and lifting the average selling price. In North America, revenue came to DKK 69 million (2013: DKK 74 million) with operating profit at DKK 12 million (2013: DKK 18 million), corresponding to a profit margin of 16.6% (2013: 24.0%). The development in North America is essentially attributable to adverse exchange rate fluctuations and expected costs related to the ongoing production capacity expansion, which is progressing to plan and expected to be fully implemented in 2014. Cash flows from operating activities amounted to a net cash inflow of DKK 43 million (2013: DKK 46 million). H1 2014 Revenue was DKK 764 million (2013: DKK 793 million) and operating profit DKK 62 million (2013: DKK 65 million), corresponding to a profit margin of 8.1% (2013: 8.2%). Exchange rate fluctuations impacted negatively on revenue by DKK 35 million and operating profit by DKK 15 million. In Europe, revenue came to DKK 622 million (2013: DKK 647 million) with operating profit at DKK 50 million (2013: DKK 44 million), corresponding to a profit margin of 8.0% (2013: 6.9%). Period-to-period fluctuations in finished deliveries in Hartmann Technology adversely impacted revenue. In North America, revenue came to DKK 142 million (2013: DKK 146 million) with operating profit at DKK 24 million (2013: DKK 33 million), corresponding to a profit margin of 17.1% (2013: 22.9%). Cash flows from operating activities amounted to a net cash inflow of DKK 52 million (2013: DKK 93 million), and return on invested capital grew to 21.2% (2013: 17.7%). Outlook for 2014 We maintain our full-year guidance of revenue of DKK 1.6-1.7 billion and a profit margin in the range of 9.0-10.5%. * References to operating profit are to operating profit before special items, and references to profit margin are to profit margin before special items.

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