HARTMANN continues its success
Profitability improved despite difficult market conditions: In fiscal year 2010, HARTMANN continued its profitable growth despite unfavorable market conditions, building on its strong sales performance in the previous year. The company was confronted with increasing budget restrictions in the health systems and substantially higher raw material and logistics costs.
The HARTMANN GROUP recorded sales revenues of EUR 1,633 million – an increase of 4.6% compared to the previous year. After last year's increase, HARTMANN further improved its profitability in 2010 at a higher level. Consolidated net income rose by 19.2% to EUR 69.8 million. An increased dividend of EUR 5.40 will be proposed to the Annual General Meeting on May 6, 2011.
In the year under review, the HARTMANN GROUP achieved sales revenues of EUR 1,633.0 million, an increase of 4.6% compared to the previous year. HARTMANN thus continued its growth path in 2010, based on its strong sales growth in 2009.
In the medical core segments Wound Management, Incontinence Management and Infection Management, HARTMANN sales revenues rose by 4.5% to EUR 1,378.9 million worldwide in 2010. Due to the similarly strong sales performance in Other Group Activities, the share of the medical core business continued at the previous year's level with 84.4%.
Different development in business segments
In the Wound Management segment, sales revenues were EUR 441.5 million, an increase of 6.0% compared to the previous year. With regard to product ranges, the strongest impetus for growth came from product systems in modern wound management as well as from postoperative dressings. In face of continued strong price pressure, the company is satisfied with its performance in traditional wound dressings and compression bandages. In fiscal year 2010, the Incontinence Management segment, which, with 36.7%, is responsible for the largest contribution to the total sales of the HARTMANN GROUP, achieved customer sales of EUR 599.9 million, an increase of 6.3% compared to the previous year.
This shows that HARTMANN is highly respected by customers as a provider of system solutions for incontinence care in medical facilities or at home despite continuing strong price pressure. After the Infection Management segment recorded the highest growth of all segments in 2009 in the process of the first-time consolidation of the BODE subsidiary and owing to the sales increase due to swine flu, HARTMANN recorded a slight decrease of 0.4% to EUR 337.4 million in the past fiscal year. Pandemic-related excess inventory at customers had to be reduced in the first half of 2010 before sales in disinfectants rose again in the second half year. The integration of the BODE sales activities into the European HARTMANN subsidiaries was completed in 2010.
In Other Group Activities, which mainly include consumer-oriented products and the trading business in medical and hygiene products, sales revenues rose by 5.6% to EUR 254.2 million in the past fiscal year.
Strong sales growth in Germany and abroad
Sales revenues in Germany increased by 2.7% to EUR 563.3 million while sales revenues outside Germany increased by 5.7% to EUR 1,069.8 million. The foreign share of total sales thus rose by 0.7 percentage points to 65.5%.
The HARTMANN GROUP improved its EBIT by 7.4% to EUR 103.4 million in the past fiscal year. At the same time, the consolidated net income rose by 19.2% to EUR 69.8 million. The general improvement of the economic situation compared to the crisis year of 2009 has not been reflected to the same extent in the health market. Here, overall cost-saving efforts due to customers’ budget restrictions impacted results in 2010. Additionally, there were further price increases in most important raw materials during the course of the year. Cellulose recorded price increases in the two-digit range. Prices for cotton even rose by more than 100 % during the year. In addition to sales growth, productivity improvements in all areas of the company in connection with the HARTMANN 2011 program continued to have a positive effect on results.
Equity ratio rose from 49.3% in the previous year to 50.2% at 2010 year-end despite a higher balance sheet total. Due to improved consolidated net income and positive exchange-rate effects, the equity capital including minority interests increased by EUR 68.3 million to EUR 569.7 million.
At the end of 2010, the number of employees in the HARTMANN GROUP rose by 467 to 9,982, an increase of 4.9%. 3,835 of these employees worked in Germany, with 6,147 in foreign subsidiaries. This is a ratio of 38.4% to 61.6%.
At the Annual General Meeting on May 6, 2011, the Management Board and the Supervisory Board will propose a dividend increase from EUR 4.90 to EUR 5.40 per share. With this proposal for the appropriation of net income, the dividend yield is 2.3% when related to the 2010 year-end rate.
Growth and profitability remain primary goals also in 2011
In the medium term, HARTMANN expects substantial spending cuts in health care leading to structural changes, declining reimbursement and growing pressure on selling prices. As a result, there will be a difficult market environment for necessary price increases. With improving global economic conditions, the company also has to deal with continually rising prices for raw materials, commodities and logistics services in 2011.
In addition to its organic growth, HARTMANN also continues to target acquisitions, on the one hand, to strategically complement solutions, and, on the other, to improve its market position in selected countries, for example, in the BRIC-states.
Under its growth strategy in the Infection Management segment, the HARTMANN GROUP will address the issues of infection control in an integrated manner. With its high scientific and medical competence in infection control, HARTMANN positions itself to customers as a recognized specialist in the prevention of infections acquired in medical institutions.
To protect its consolidated net income, the company is intensively continuing its HARTMANN 2011 program. This covers all areas and functions of the company with the aim of sustainably increasing production.Dr. Rinaldo Riguzzi, Chairman of the Management Board: "We are well positioned for the current fiscal year despite difficult market conditions. Across all our four business segments, I expect further above-market organic growth with consolidated operating profit at last year's level."