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Market position in the medical business further strengthened
In fiscal year 2006, the HARTMANN GROUP continued to implement its FOCUS Group strategy. With customized system solutions, the company strengthened its position as a solution partner for the medical and nursing sector. The share of the medical core business in the total sales of EUR 1.2 billion rose from 79% to 82%. In the Wound, Incontinence, and Operating Theater Management segments, the company increased its sales volume by 6.1%. Taking into account the difficult market conditions and the 2.6% price decline, the company increased its sales revenues in the core segments by 3.5%. The consolidated net income rose by EUR 2.0 million to EUR 41.6 million. A dividend increased to EUR 3.40 will be proposed to the Annual General Meeting on May 16, 2007.
Organic Group sales showed sound growth
In 2006, the HARTMANN GROUP generated sales revenues of
EUR 1,216.9 million worldwide, which is an increase of 0.2% compared to the previous year. Taking into account the changes in the scope of consolidation in 2005, particularly the sales of the baby diaper brand business, organic growth was 2.7% on a comparable basis. By focusing on the core segments of Wound, Incontinence and Operating Theater Management, the quality of the sales revenues increased. Here HARTMANN achieved to raise its sales revenues by 3.5% for the year. Taking into account the 2.6% price decline, the company increased its sales volume in the core segments by 6.1%, further strengthening its market position. The medical core business now comprises 82.1% of total sales, representing a 2.7% growth over the previous year.
Sales growth in all three core segments
With sales of EUR 465.0 million, Incontinence Management was again the strongest performing segment. Despite the high price pressure in the tender business and restrictive reimbursement practice for absorbent incontinence products, growth was up 2.6% over the previous year.
In the Wound Management segment, the company achieved sales revenues of EUR 366.7 million, a 3.1% growth rate. Despite considerable pressure on the traditional dressing materials sector through a larger number of local price aggressive competitors, HARTMANN reported pleasing growth rates in foreign markets.
With a 6.9% increase to EUR 167.3 million, the Operating Theater Management segment also reported a satisfying growth in sales. The continuing double-digit growth with customized complete surgical sets shows that HARTMANN is well positioned with its product solutions when regarding the high price pressure in the hospital business.
For Other Group Activities to which primarily end consumer ranges and trading activities are assigned, HARTMANN reduced sales revenues by 12.8% to EUR 217.9 million conforming to strategy.
European markets gaining importance
In 2006, the HARTMANN GROUP further strengthened its position as one of the leading international providers of medical and hygiene products. The foreign share of total sales rose by 1.5% to 64.6% over the previous year. Sales revenues increased to EUR 786.6 million here. In Germany, changes in the investment portfolio in 2005 primarily led to a 4.1% decline to EUR 430.3 million. In Europe, excluding Germany, the company increased its sales revenues by 3.5 % to EUR 672.6 million; however, the growth in the medical core segments was 5.7% in this area.
Consolidated net income further improved
The clear focus on the medical core segments had a positive effect on the development of income also in 2006. With an operating consolidated net income (result before special factors) of EUR 34.1 million, HARTMANN exceeded its pleasing EUR 32.1 million result of the previous year.
With the aim of focusing on sustainability in Group control, the reported result was adjusted for special factors which had a positive effect of EUR 7.5 million on the consolidated net income balance. Taking into account such special factors, the consolidated net income was EUR 41.6, an increase of EUR 2.0 million over last year. Correspondingly, return on sales rose from 3.3% to 3.4% in 2006.
In addition, HARTMANN further strengthened the substance of the company during the past fiscal year: with 49.1% the equity ratio was 3.0% above last yearÃÂÃÂÃÂâÃÂÃÂÃÂÃÂÃÂÃÂÃÂÃÂs level. Moreover, net debt was further reduced by EUR 17.8 million to EUR 132.1 million. Debt reduction of the group has proceeded as planned.
Number of employees declined
At the end of 2006, the HARTMANN GROUP had 8,752 employees worldwide, 362 less than the previous year. 3,368 of them worked in Germany and 5,384 were based outside Germany; with a ratio of 38% to 62%, the ratio of employees working inside Germany to those working outside Germany remained at last yearÃÂÃÂÃÂâÃÂÃÂÃÂÃÂÃÂÃÂÃÂÃÂs level.
Dividend proposal: EUR 3.40 per share
During the Annual General Meeting on May 16, 2007, the Supervisory Board and the Management Board will propose increasing the dividend by 3.0 % from EUR 3.30 to EUR 3.40. With this appropriation of net income the dividend yield is 2.1 %, when related to the 2006 year end rate.
Profitable growth expected to continue
Despite ongoing difficult market conditions, the HARTMANN Group expects continued growth in the medical core segments in 2007. "Our new profile as a provider of customized solutions including products and services is well accepted in the market. We are therefore convinced that we will achieve profitable sales by providing professional system solutions also in future" , Dr. Rinaldo Riguzzi, CEO of PAUL HARTMANN AG, stated as an outlook at the press conference presenting the annual financial statements in Stuttgart. For Other Activities of the Group, HARTMANN expects a moderate increase in sales revenues. With profitable sales revenues in the core segments and the improved income of the German subsidiaries, the company expects further increase of consolidated net income in the current fiscal year.
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HARTMANN GROUP |
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in EUR million |
2006 |
2005 |
Changes to the
previous year |
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absolut |
in % |
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Sales revenues |
1,216.9 |
1,214.9 |
+2.0 |
+0.2 |
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Percentage thereof generated outside Germany |
64.6 |
63.1 |
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Adjusted for currency fluctuations and organic sales revenues |
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+2.7 |
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Consolidated net income |
41.6 |
39.6 |
+2.0 |
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Net return on sales in % |
3.4 |
3.3 |
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Equity ratio in % |
49.1 |
46.1 |
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Number of employees on December 31 |
8,752 |
9,114 |
-362 |
-4.0 |
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Dividend in EUR |
3.40 |
3.30 |
+0.10 |
+3.0 |
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Krzysztof-Daniel Malowaniec
PAUL HARTMANN AG
Phone: +49(0)7321/36-1910
Fax: +49(0)7321/36-3678
Email:k-d.malowaniec@hartmann.info
Matthias Mietka
PAUL HARTMANN AG
Phone: +49(0)7321/36-1380
Fax: +49(0)7321/36-2380
Email:matthias.mietka@hartmann.info
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