HARTMANN in numbers

HARTMANN at a glance

HARTMANN’s company history dates back over 200 years. Today we are one of the leading providers of professional medical and care products and associated services in the European market. We are represented in 36 countries and sell our diverse portfolio to service providers in over 130 countries.

In a world where health is becoming an increasingly important matter, we offer our customers simple and effective solutions for the benefit of their 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 2022, we employed over 10,000 staff worldwide and generated sales of EUR 2.3 billion.

The HARTMANN solutions

The activities of the HARTMANN GROUP are reported in business segments: Wound Care, Incontinence Management, Infection Management, and Complementary Group Divisions, which primarily include Kneipp, CMC, and KOB.

Growth in the Wound Care segment

At EUR 565.2 million, sales in the Wound Care segment were EUR 72.8 million over the previous year. Organic sales growth stood at 12.1 percent. This growth is the result of an active pricing strategy, successful development in advanced wound care, and the recovery of traditional wound care, following the coronavirus pandemic among other things.

The number of surgeries and visits to doctors and pharmacies continued to grow over the year, above all in Europe, which had a positive impact on the demand for wound care products. Growth was driven especially by the new ranges of silicone-covered and postoperative wound dressings, non-adhesive fixation products, and Vivano® products for vacuum-assisted wound therapy.

Alongside the clear growth in sales, organizational measures to improve efficiency have helped further increase profitability in the Wound Care segment. Adjusted EBITDA rose by EUR 14.1 million to EUR 100.9 million in the reporting year.

Increase in sales in the Incontinence Management segment

Sales revenues in the Incontinence Management segment stood at EUR 720.8 million in the reporting year. The organic sales growth of 4.5 percent is attributable to the necessary price adjustments resulting from increased costs. In addition, the volume attributable to care homes grew due to the higher bed occupancy rate. This ensures increased demand for incontinence products.

The product ranges with particularly strong sales during the reporting year included both the unisex, at 8.6 percent, and the gender-specific disposable pants first introduced a few years ago, which were up 17.7 percent compared to the previous year, with incontinence pads up 5.8 percent and the Vala® disposable care range up 9.6 percent.

The reporting year was affected by considerable increases in raw material and transport costs. Cost-cutting measures and price adjustments were able to compensate for these developments only partially. Adjusted EBITDA in the Incontinence Management segment in 2022 was EUR 68.6 million – hence EUR 19.3 million below that of the previous year.

Infection Management's sales decline

The Infection Management segment reported sales revenues of EUR 557.7 million in 2022. This represents a serious decline of 18.8 percent in sales, the main drivers being in the examination gloves and sanitizer ranges. The examination gloves range suffered a fall in demand due to the coronavirus pandemic's transition into an endemic phase. Sales of examination gloves were down due to the price drop. In surgery-related areas, kits and coverings performed positively thanks to imposed price rises and volume gains.

The clear decline in sales in the segment of Infection Management was due to the shift away from the special pandemic-related circumstances of the preceding years. Due to customers holding high levels of stock, demand dropped particularly for hand sanitizer. In terms of income, price increases could not compensate for this development or the increased raw materials prices.

In this context, adjusted EBITDA in the Infection Management segment fell by EUR 19.6 million to EUR 17.8 million.

Diminishing results in HARTMANN's Complementary Group Divisions

Sales revenues in HARTMANN's Complementary Group Divisions stood at EUR 467.9 million in 2022. This equates to an organic increase of 4.4 percent in sales. In all areas, the significant cost increases led to declining business performance. At EUR 3.6 million, the adjusted EBITDA for the reporting year in the Complementary Group Divisions segment was significantly below that of EUR 28.7 million in the previous year.

Like the KOB Group, the CMC Group achieved organic sales growth. For CMC, this was largely a result of an increase in the sales prices of cotton wool products whereas for the KOB Group, it was thanks to positive performance of compression bandages. In 2022, the Kneipp Group was confronted with shrinking markets in Europe and strong price pressure in the bath product categories. Here, consumers increasingly opted for cheaper products.

Organic growth in EMEA and APAC regions and Americas

In its core sales market in Germany, the HARTMANN GROUP achieved sales revenues of EUR 720.4 million in the 2022 financial year. This equates to a moderate organic decline of 7.5 percent in sales due to a decline in demand for PPE and sanitizer. Sales revenues in the EMEA region (Europe minus Germany, the Middle East, and Africa) stood at EUR 1,371.6 million, representing organic growth of 2.0 percent compared to the previous year. Sales revenues in the APAC region (Asia and the Pacific region) came to EUR 144.8 million in the reporting year. Compared to the previous year, this equates to an organic growth of 6.1 percent. In the Americas, HARTMANN recorded an organic increase of 7.2 percent in sales, amounting to EUR 74.8 million.

During the reporting period, the ratio of domestic to foreign sales revenue at HARTMANN moved slightly in favor of foreign sales: Germany accounted for EUR 720.4 million of the Group sales, or 31.2 percent (33.8 percent in the previous year). HARTMANN achieved 68.8 percent of Group sales abroad. This equates to a figure of EUR 1,591.2 million.

Following the pandemic-related price increase of key raw materials in the previous year, this year their prices were equally affected by the impact of the Russia-Ukraine war. Cellulose is the raw material HARTMANN purchases in the greatest volume. The price of fluff pulp grew continuously until July 2022 and then stabilized at the high level of USD 2,230/mt, before falling to USD 2,190/mt at the end of the year. This meant that by December 2022, the price was USD 550 above the rate of USD 1,640/mt at the end of the previous year. The prices of polymers such as polyethylene and polypropylene were affected by the oil price and also reached record highs in 2022.

At the same time, prices were subject to high fluctuation. The polymer prices rose continuously until the beginning of the second quarter. There was then movement in the opposite direction, with price decreases. The US dollar, which was on average significantly stronger during the year, made up for price downturns, and purchase costs remained high. Fixed-price contracts and associated hedging instruments also had a supportive effect.

Performance indicators

The various commercial and geopolitical challenges during the 2022 financial year had a significant impact on the business performance of the HARTMANN GROUP. In particular, the higher costs of materials, logistics, and energy had a negative effect across all segments. As planned, the Transformation Program made a noticeable and positive contribution to the Group's profitability, thereby addressing the opportunities and challenges of the healthcare market, as well as measures to improve results.

Combined with the disruptions to supply chains and the existing and additional infection-related staff shortages in the health sector, higher costs harmed business performance during the reporting year. Targeted price adjustments have enabled HARTMANN to partially compensate for these developments. The product launches that were part of the Transformation Program have had a positive effect.

Moderate decline in sales

To manage the growth in sales revenues and for transparent communication, HARTMANN uses organic sales growth as its central sales performance metric. Overall, the HARTMANN GROUP recorded a slight organic decline in sales of 0.8 percent during the reporting year. Since price increases were successfully passed on to customers, the organic decline in sales was only slight. At the time of the forecast in the 2021 annual report, a moderate decline in sales was still anticipated.

In 2022, consolidated sales of the HARTMANN GROUP across all business segments amounted to EUR 2,311.6 million. Compared to the previous year, this equates to an increase of 0.4 percent. Acquisitions/divestments had no impact on the HARTMANN GROUP's overall growth while the currency impact was +1.2 percent.

Transformation Program contributed to profitability

During the reporting year, the adjusted EBITDA stood at EUR 190.8 million compared to EUR 240.6 million in the previous year and was therefore at the lower limit of the outlook published in the 2021 annual report and within the reported range as specified in December 2022. The adjusted EBITDA return fell from 10.5 percent in 2021 to 8.3 percent in the reporting year.

The reason for this was primarily the increases in material and freight costs, which could only partially be passed on, and costs associated with higher stock-in-trade and warehousing costs. On the other hand, the Transformation Program, which focuses among other things on cost reductions and efficiency improvements, contributed about EUR 40 million to the company's profitability over the financial year.

During the 2022 financial year, HARTMANN adjusted its operational results. Restructuring costs of EUR 1.6 million were incurred as part of the focus on strategy. These were largely incurred by the relocation of production in the Wound Care segment and location optimization at Kneipp. Other adjustments of EUR 24.2 million were incurred, among other things, by implementing digital initiatives for the future (SAP® S/4HANA) and pending litigation relating to circumstances from previous financial years.

EBITDA slightly lower than previous year

The HARTMANN GROUP's EBITDA for the reporting year comes to EUR 165.0 million (previous year: EUR 232.9 million). The financial result declined from EUR -0.2 million in 2021 to EUR -2.8 million. Income tax expense during the reporting period amounted to EUR 21.1 million, whereas in 2021 it had been EUR 38.1 million. Compared to the previous year, consolidated net income declined by EUR 57.6 million to EUR 39.5 million.