Hartmann Corporate presentation 1 Q1 2020 highlights Europe, - PowerPoint PPT Presentation

Hartmann Corporate presentation 1

Q1 2020 highlights Europe, Americas machinery and 40% technology 2% Growth Strong volume growth in core business • +11% Good utilisation of expanded capacity • Revenue Intensified sales and marketing efforts • DKK 663 million Earnings Historically high earnings • +95% High utilisation and production efficiency • Europe, Improved raw material prices • packaging 58% Americas 40% Investments Expansion plans in Europe, the USA and Brazil • +49% Conditional acquisition of Mohan Fibre in early 2020 • Profit margin 18.0% Mohan Fibre acquisition expected to close by mid-2020 • Europe References to operating profit and profit margin are before special items, unless otherwise stated. 2 60% Operating profit, profit margin and ROIC are stated before hyperinflation (IAS 29) restatement.

Segment overview – Q1 2020 Americas Revenue: DKK 264m (+7%) Profit margin: 19.1% (2019: 13.5%) Expanded capacity enabled strong volume growth High utilisation and production efficiency lifted earnings Economic downturn in Argentina and currency effects Europe Revenue: DKK 398m (+14%) Profit margin: 18.9% (2019: 9.7%) Strong utilisation of expanded production capacity Solid volume growth and improved product mix Higher technology sales and improved raw material prices Currency movements, primarily related to the Argentine peso (ARS), reduced 3 revenue by DKK 34 million and operating profit by DKK 3 million in Q1 2020.

Strategy – trends and strengths Trends Strengths Demographics 10 Population growth Expertise Platform Increasing prosperity Urbanisation billion people in 2050 Customer advice Solid market positions Retail growth Consumer research +50 countries Data-based approach 12 factories + 2 in 2020 Sustainability Growing awareness 4x Single-use plastic ban Well-proven alternative plastic consumption in 2050 Products Technology Consumer behaviour Versatile portfolio Proven since 1936 Consumption growth 58% Renewable and tailored Industry-leading Demand for more egg types FSC and CO 2 neutral Internal and external Focus on nutrition and animal welfare more product launches in 2018 versus 2014 Clear differentiation of eggs 4

Strategy – focus Capacity Efficiency Marketing Increase capacity Continuous cost reduction Focus on expertise and • • • products Strengthen presence in Automation of production • • existing markets Highlight moulded fibre • Improved processes and • eco-friendliness Explore new markets methods • Initiatives Initiatives Initiatives Investments in automation Added capacity in Several consumer surveys Europe and Argentina Technology implementation Customer sparring and advice Significant expansions in 2020 Organisational adjustments Intensified marketing efforts Indian acquisition in 2020 Higher output per employee 5

The longer perspective Solid earnings Attractive returns Strong cash flow Profit margin (%) ROIC (%) Cash flow - operating 15 30 450 11.1% 1% DKK 296m 18.2% 2% 10 20 300 5 10 150 0 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Favourable market trends + + Demographics Sustainability Consumer behaviour 6

Guidance 2020 and financial ambitions Guidance 2020 Ambitions Continual growth in packaging sales Revenue Profit margin guidance lifted to 12-15% • DKK 2.4-2.6bn from 10-12% on 30 April after strong Q1 Volume growth in core business • Year-on-year revenue growth Slightly higher machinery sales • Profit margin* 12-15% Moderate contribution from India • Investments include conditional acquisition • Profit margin* of at least of Indian business for DKK 119m Investments 14% DKK ~400m COVID-19 entails reduced visibility and • increased operational risk More on COVID-19 19 in the Q1 interim m *Before restatement for hyperinflation and special items report ort on page e 8 7

Contact information Brødrene Hartmann A/S Ørnegårdsvej 18 DK-2820 Gentofte Tel. (+45) 45 97 00 00 investor@hartmann-packaging.com Torben Rosenkrantz-Theil CEO Upcoming events Q2 interim report 19 August 2020 Q3 interim report 18 November 2020 Flemming Steen CFO 8

Appendix: Financials Q1 2020 Significant revenue growth across markets • Revenue (DKKm) – Strong development in volumes and product mix Inclu ludin ing IAS 29 – Higher machinery and technology sales of DKK 16m (2019: DKK 4m) 800 600 Historically strong earnings • 400 – Volume growth and high utilisation of expanded capacity – Higher revenue and improved product mix and raw material prices 200 0 Q1-18 Q3-18 Q1-19 Q3-19 Q1-20 DKKm Q1 2020 Q1 2020 Q1 2019 Q1 2019 Americas Europe, packaging Europe, machinery and technology excl. IAS 29 excl. IAS 29 Profit margin excl. IAS 29 (%) Revenue 663 663 596 599 20 Operating profit 116 119 58 61 15 Special items (5) (5) 0 0 10 Profit 58 63 37 41 5 Free cash flows (operating and investing) 30 30 18 18 0 Invested capital 1,472 1,423 1,434 1,397 Q1-18 Q3-18 Q1-19 Q3-19 Q1-20 Profit margin, % 17.5 18.0 9.8 10.2 Profit margin (rolling 12 months) ROIC, % 20.6 22.0 13.6 14.7 9

Appendix: Key figures and financial ratios Q1 DKKm 2020 2020 2019 2019 excl. IAS 29 excl. IAS 29 Revenue 663 663 596 599 Europe, packaging 382 382 345 345 Europe, machinery and technology 16 16 4 4 Americas 264 265 248 250 Operating profit 116 119 58 61 Europe 75 75 34 34 Americas 48 51 31 34 Special items (5) (5) 0 0 Net financials (32) (30) (7) (7) Profit 58 63 37 41 Free cash flows 30 30 18 18 Profit margin, % 17.5 18.0 9.8 10.2 10

Appendix: Balance sheet DKKm 31.03.20 31.03.20 31.03.19 31.03.19 excl. IAS 29 excl. IAS 29 Assets 2,054 2,012 1,975 1,941 Net working capital (NWC) 346 345 304 304 Invested capital (IC) 1,472 1,423 1,434 1,397 Net interest-bearing debt 607 607 640 640 Equity 872 838 816 791 ROIC, % 20.6 22.0 13.6 14.7 Equity ratio, % 42.4 41.6 41.3 40.7 Gearing, % 69.6 72.4 78.4 80.9 11

Appendix: Hyperinflation Read ad more e in the Q1 interim im report rt on page e 10 12

Forward-looking statements Disclaimer This presentation contains forward- looking statements reflecting management’s expectations of future events and must be viewed in the context of among other things the business environments and currency markets, which may cause actual results to deviate materially from those projected by Hartmann. 13