Brdr. Hartmann

Interim / Quarterly Report • Aug 16, 2023

Contents

Management report

• 3 Q2 2023 highlights
• 4 Key figures
• 5 Eurasia
• 7 Americas
• 9 Outlook
• 10 Risk management
• 11 Management statement
• 25 Hyperinflation in Argentina
• 26 Hartmann at a glance

Condensed consolidated interim financial statements

• 13 Revenue and earnings
• 14 Statement of comprehensive income
• 15 Cash flows
• 16 Statement of cash flows
• 17 Balance sheet and equity
• 18 Balance sheet
• 19 Statement of changes in equity
• 20 Notes

Forward-looking statements Follow us here:

The forward-looking statements in this interim report reflect Hartmann's current expectations for future events and financial results. Such statements are inherently subject to uncertainty, and actual results may therefore differ from expectations. Factors which may cause the actual results to deviate from expectations include general economic developments and developments in the financial markets, changes or amendments to legislation and regulation in Hartmann's markets, changes in demand for products, competition and the prices and supply of raw materials. See the sections on risk management in this interim report and note 29 of the 2022 annual report.

Q2 2023 highlights

Hartmann increased earnings in Q2 2023, mainly attributable to a solid performance in the Americas segment and despite continued market volatility with low visibility. On the back of solid H1 2023 results, earnings guidance for 2023 was updated 3 August 2023.

Revenue (DKKm)

804

DKK 794 million in Q2 2022

Stable revenue was achieved in a continued volatile and inflationary environment. North America and Argentina demonstrated progress mainly due to higher average selling prices and despite lower volumes in soft markets.

Operating profit (DKKm)

DKK 56 million in Q2 2022

Investments (DKKm)

58

DKK 46 million in Q2 2022

Investments were in line with expectations, and it was decided to invest further in the continued and ongoing capacity expansion in Europe.

All raw material prices are expected to remain volatile and above pre-energy crisis levels in H2 2023.

product mix.

112

The significant earnings increase was mainly driven by the Americas segment and arising from higher revenue, exchange rate effects and cost improvements. Also, the Eurasia segment improved earnings mainly due to lower raw material prices and improved

In a continuously challenging environment, we increased earnings while maintaining steady revenue, mostly because of positive developments in the Americas. Cost improvements and better efficiency across the business allowed us to raise earnings guidance for the entire year to DKK 375-475 million.

Key figures

DKKm	Q2 2023	Q2 2022	H1 2023	H1 2022
Comprehensive income
Revenue	804	794	1,717	1,546
Operating profit1	112	56	269	98
Operating profit after restatement for hyperinflation	108	46	260	80
Special items	0	0	0	0
Operating profit after special items	108	46	260	80
Net financial income and expenses	(19)	(9)	(40)	(2)
Profit before tax	88	37	220	78
Profit for the period	58	21	148	46
Result from discontinuing operations	(51)	(74)	(46)	(73)
Profit for the period incl. discontinuing operations	7	(53)	101	(27)
Comprehensive income	6	53	91	105
Cash flows
Operating activities	168	70	310	56
Investing activities	(56)	(41)	(121)	(75)
Financing activities	(93)	(8)	(187)	95
Total cash flows	18	21	2	76
Balance sheet
Assets	-	-	2,811	2,819
Assets incl. discontinuing operations	-	-	2,822	2,988
Investments1	58	46	122	80
Investments in property, plant and equipment	57	46	116	80
Net working capital	-	-	486	447
Invested capital	-	-	2,070	2,103
Net interest-bearing debt (NIBD)	-	-	762	991
NIBD excl. lease liabilities	-	-	702	920
Equity	-	-	1,312	1,301

DKKm	Q2 2023	Q2 2022	H1 2023	H1 2022
Financial ratios, %
Profit margin1	13.9	7.1	15.6	6.3
Profit margin after restatement for hyperinflation	13.4	5.8	15.2	5.2
Return on invested capital (ROIC), rolling 12 months	-	-	18.9	3.4
Return on equity, rolling 12 months	-	-	12.2	(4.9)
Equity ratio	-	-	46.7	46.2
Gearing	-	-	58.1	76.2
Share-based financial ratios
No. of shares (excl. treasury shares)	-	-	6,915,090	6,915,090
Earnings per share (EPS), DKK	8.3	3.1	21.4	6.7
Cash flows per share, DKK	24.3	10.1	44.9	8.0
Book value per share, DKK	-	-	189.8	188.2
Share price, DKK	-	-	279.0	240.0
Share price/book value per share	-	-	1.5	1.3
Share price/earnings (P/E), rolling 12 months	-	-	12.0	(27.0)
Market capitalisation, DKKm	-	-	1,957.2	1,683.6

¹ In order to provide a more accurate view of Hartmann's underlying operations and financial performance, operating profit and profit margin are stated before special items and restatement for hyperinflation (IAS 29). Furthermore, investments are presented before restatement for hyperinflation.

Actual and comparative figures have been restated to present continuing operations, unless explicitly stated that discontinuing operations are included.

For definitions of key figures and financial ratios, see note 36 in the annual report for 2022.

Eurasia

In Q2 2023 the Eurasia segment generated stable revenue in a continued inflationary environment and against a strong performance in the same quarter last year. Earnings improved mainly driven by lower raw material prices and improved product mix. Hartmann still expects energy costs to remain volatile and higher than pre-energy crisis levels.

Revenue

In Q2 2023, revenue amounted to DKK 447 million (2022: DKK 448 million). Against a strong performance in Q2 2022 improved product mix was offset by lower temporary charges linked to energy prices implemented during 2022 as well as lower sales in India, where operations are being re-established after the fire in May 2022.

In H1 2023, revenue increased to DKK 973 million (2022: DKK 891 million) on the back of a solid performance in Q1 2023.

For the rest of 2023, Hartmann still expects energy and other raw material prices to remain volatile and above pre-energy crisis levels.

Earnings

Operating profit grew to DKK 58 million (2022: DKK 36 million), for a profit margin of 13.0% (2022: 8.0%) against the same period last year, which was significantly impacted by historically high raw material prices and rising inflation. The progress mainly arose from lower raw material prices and improved product mix across the segment.

In H1 2023, operating profit increased to DKK 150 million (2022: DKK 59 million), for a profit margin of 15.4% (2022: 6.7%).

Investments

In Q2 2023, Hartmann invested DKK 39 million (2022: DKK 19 million). In H1 2023, the investment level increased to DKK 91 million (2022: 28 million), hereof DKK 57 million in the re-establishment of the factory in India, where insurance reimbursement amounted to DKK 42 million. Furthermore, it was decided to invest further in the continued and ongoing capacity expansion in Europe.

Discontinuing operations

As a consequence of the Russian invasion of Ukraine in February 2022, Hartmann initiated a sales process for its Russian factory and the activities were classified as discontinuing operations. In Q2 2023, Hartmann recognised an impairment loss of DKK 55 million following a new fair value assessment. For further information see note 6 on page 23.

Revenue (rolling 12 months)

2021

2021

Operating profit Profit margin (rolling 12 months)

2022

2022

2023 0 5

Investments Investments (rolling 12 months)

INTERIM REPORT H1 6 2023 HARTMANN

Americas

In Q2 2023, activities in the Americas delivered satisfactory revenue growth and solid earnings improvements. Progress was mainly driven by the North American and Argentine businesses.

Revenue

In the Americas, revenue grew to DKK 357 million (2022: DKK 346 million) in Q2 2023 supported by higher average selling prices as well as cost improvements and despite slightly declining sales volumes in North America.

In North America, the egg market continued to be subdued, and supermarkets' promotional activities remained below pre-COVID 19 levels.

In South America, the Argentine business contributed positively to revenue, while performance in Brazil was stable.

In H1 2023, revenue increased to DKK 745 million (2022: DKK 655 million), driven by a strong Q1

Earnings

Operating profit increased to DKK 61 million (2022: DKK 26 million) on the back of higher revenue, exchange rate effects and cost improvements. Profit margin was 17.1% (2022: 7.6%).

In H1 2023, operating profit grew to DKK 136 million (2022: DKK 52 million), for a profit margin of 18.2% (2022: 8.0%).

Investments

Hartmann invested DKK 18 million (2022: DKK 24 million) in the Americas in Q2 2023, and DKK 26 million (2022: DKK 47 million) in H1 2023.

Investments Investments (rolling 12 months) 2023 performance.

Outlook

Hartmann updated its 2023 earnings guidance 3 August 2023, cf. company announcement no. 12.

On the back of a solid Q2 and H1 2023 financial performance based on cost improvements and efficiency gains in both the Americas and the Eurasia segments, Hartmann now expects to generate an operating profit1 of DKK 375-475 million (previously DKK 300-400 million).

The expected revenue range of DKK 3.4-3.8 billion is unchanged.

In comparison with average pre-energy crisis price levels, we expect energy and raw material prices to remain volatile, with a particular risk of rising natural gas prices during the winter 2023/24.

Guidance2 , 2023

DKKm	Updated 3 August	Updated 1 May	Original 7 March
Revenue	3,400-3,800	3,400-3,800	3,400-3,800
Operating profit1	375-475	300-400	220-320
Investments3	~300	~300	~300

1 Before restatement for hyperinflation and special items 2 For continuing operations

3 Excluding investments covered by insurance Investments are still expected at around DKK 300 million in 2023.

Other assumptions

Hartmann is re-establishing operations at the Group's Indian factory following the fire in Q2 2022. The expected ordinary investments of DKK 300 million do not include the re-establishment compensated by insurance coverage.

Guidance is based on the exchange rates prevailing at the date of release of company announcement no. 12/2023. Due to seasonal fluctuations in Hartmann's packaging sales, revenue and operating profit in the core business are generally higher in Q1 and Q4 than in Q2 and Q3.

Navigating in a challenging environment

In addition to the continued volatile energy and raw material prices, we expect that the prevailing inflationary environment as well as challenging macroeconomic environment with low visibility and geopolitical uncertainty will continue in the rest of 2023 - with potential impact on market supply and demand.

Hartmann's South American markets remain impacted by macroeconomic uncertainty, currency fluctuations and political tension, which may impact market conditions.

For further reference see annual report 2022, pages 8-9.

Risk management

fire.

Fire Raw materials Disease outbreaks among hens Politics and macroeconomics Environment

Description	The production of egg and fruit packaging is based on paper-based moulded fibre dried at high temperatures, and Hart mann's single most significant risk is the total loss of a factory from fire. Re-es tablishing the facilities would be very time consuming and involve the risk of both business interruption and loss of market share as the reliability of supply is crucial to Hartmann's customers.	Fluctuations in procurement prices of recycled paper and energy (electricity and gas) may have a significant impact on the group's financial results as adjustments of selling prices with a view to miti gating increases in raw materials prices must take into account the competitive situation and will be implemented at a certain time lag. Inadequate supplies of raw materials for Hartmann's production may cause business interruption, impede satisfactory deliveries to customers and force the group to purchase raw materials on less attractive terms.	Egg packaging sales are exposed to changes in demand for eggs, which in turn may be influenced by disease outbreaks among laying hens and consumer fears of resulting health hazards. Moreover, the outbreak of diseases such as bird flu will typically entail fluctuations in the population of laying hens and volatility in egg supply and prices.	While the consumption of eggs and fruit has historically been resilient to slowdowns in economic growth, polit ical and macroeconomic uncertainties may cause significant shifts in Hart mann's sales across product categories. Moreover, trade barriers and significant currency fluctuations may affect the competitive strength of some factories and the group's financial results.	Violations of environmental legislation, rules or thresholds in connection with, for instance, wastewater discharge, CO2 emissions, waste disposal or inadvertent chemical spills may lead to business interruption, fines or other sanctions and harm Hartmann's reputation and internal and external stakeholder relationships.
Mitigating action	Hartmann continuously monitors and reviews fire conditions at its factories and invests in physical separation of equipment, high-efficiency sprinkler and alarm systems, adequate water supply and other fire protection equipment as well as in the training and education of local fire brigades among our employees. The internal steering committee conducts regular factory visits and organises visits by external experts. In addition, Hartmann has taken out an all risk insurance policy for all production facilities covering fire damage, consequential loss and other incidents. In addition to strengthening the group's supply capacity, the spreading of production across 15 factories also helps to reduce the total financial impact in case of a factory	Hartmann seeks to make up increases in purchase prices by adjusting selling prices. In addition, Hartmann works actively to enhance the efficiency of production at individual factories and optimise distri bution to the group's customers in an effort to reduce its exposure to fluctuations in the prices of recycled paper and energy. These measures include efforts to reduce the volume of energy consumed during the manufacturing process, reduce waste in production and optimise allocation between the group's factories, taking into account customer demand and locations. Hartmann has contracted with several suppliers of recycled paper, energy and other raw materials with a view to mitigating the risk of non-delivery. Recycled paper systems and supply vary considerably across the group's markets, and long-term fixed-price agreements for recycled paper are generally not obtainable. Hartmann has the option of signing fixed-price agreements, typically for six or 12 months, for part of the group's energy consumption with energy suppliers in areas with well-functioning markets. The group regularly analyses whether entering into such agreements is attractive and	The geographical scope of Hart mann's production with factories located in Europe, North and South America, India and Russia helps to mitigate the total negative impact of local or regional disease outbreaks on the group's financial performance. At the same time, thanks to its versa tile product portfolio and adaptability, Hartmann is able to vary its product offering according to shifts in demand patterns occurring during and in the wake of such disease outbreaks.	Hartmann monitors its markets carefully in order to be able to respond quickly to negative trends by, for instance, changing the allocation of the group's production between factories and adjusting the product offering in the markets concerned. In particular, Hartmann monitors closely the political and macroeconomic developments in Russia1) and Argentina. Any negative trade barrier impacts are mitigated by Hartmann's geograph ical diversification and sales to local markets.	Hartmann monitors environmental risks at local and central level with a view to preventing, mitigating or minimising the group's environmental footprint. To that end, Hartmann continually invests in new production technology, optimisation of existing equipment and processes and system atic waste reduction. With a view to ensuring a structured and efficient approach to environmentally sound and energy-efficient production, a number of Hartmann's production facilities are certified to the ISO 14001 (environ mental management) and ISO 50001 (energy management) standards.

Reference is made to the risk management section and note 29 in the annual report for 2022 for a full description of Hartmann's risk management approach. 1) For further information see note 6 on page 23.

explores possibilities for using alternative types of raw materials.

Management statement

Today, the board of directors and the executive management have discussed and approved the interim report of Brødrene Hartmann A/S for the three months period 1 April - 30 June 2023 and the six months period 1 January - 30 June 2023.

The interim report, which has been neither audited nor reviewed by the company's auditors, was prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the EU and Danish disclosure requirements for interim reports of listed companies.

In our opinion, the condensed consolidated interim financial statements give a true and fair view of the group's assets, liabilities and financial position at 30 June 2023 and of the results of the group's operations and cash flows for the three months period 1 April - 30 June 2023 and the six months period 1 January - 30 June 2023.

We are of the opinion that the management report includes a fair review of the development in the group's operations and financial matters, the results for the period and the financial position of the consolidated entities as a whole as well as a description of the principal risks and uncertainties facing the group.

Gentofte, 16 August 2023

Management:

Torben Rosenkrantz-Theil Kenneth Kongsgaard Kristensen CEO CFO

Board of directors:

Henrik Marinus Pedersen Michael Strange Midskov Marianne Schelde Chairman Vice chairman

Klaus Bysted Jensen Palle Skade Andersen

INTERIM REPORT H1 11 2023 HARTMANN

Condensed consolidated interim financial statements

Revenue and earnings

• Statement of comprehensive income
• Cash flows
• Statement of cash flows
• Balance sheet and equity
• Balance sheet
• Statement of changes in equity
• Notes

Revenue and earnings

Revenue

In Q2 2023, revenue grew to DKK 804 million (2022: DKK 794 million). H1 2023 revenue increased to DKK 1,717 million (2022: DKK 1,546 million). Actions to mitigate significant price increases of raw materials impacted the comparison period.

Currency fluctuations reduced revenue by DKK 10 million in Q2 2023 and by DKK 5 million in H1 2023, excluding Argentina where significant currency fluctiations of the ARS in general is offset by inflation.

Operating profit

In Q2 2023, operating profit came to DKK 112 million (2022: DKK 56 million), for a profit margin of 13.9% (2022: 7.1%). In H1 2023, Hartmann's operating profit increased to DKK 269 million (2022: 98 million), for a profit margin of 15.6% (2022: 6.3%).

After restatement for hyperinflation, Hartmann's operating profit was DKK 108 million (2022: DKK 46 million), for a profit margin of 13.4% (2022: 5.8%) in Q2 2023. In H1 2023, operating profit after restatement for hyperinflation came to DKK 260 million (2022: DKK 80 million), for a profit margin of 15.2% (2022: 5.2%).

Currency fluctuations increased operating profit by DKK 9 million in Q2 2023 and by DKK 27 million in H1 2023, excluding effects of the ARS.

Financial income and expenses

In Q2 2023, financial income and expenses were a net expense of DKK 19 million (2022: net expense of DKK 9 million) and in H1 2023 a net expense of DKK 40 million (2022: net expense of DKK 2 million). The development related to loss from hyperinflation adjustments in Argentina and higher interest expenses from credit institutions and overdraft facilities.

Profit for the period

For Q2 2023, Hartmann's profit before tax increased to DKK 88 million (2022: DKK 37 million) and to DKK 220 million (2022: 78 million) for H1 2023. Tax on the profit for the period was an expense of DKK 31 million (2022: DKK 15 million), giving an effective tax rate of 35% (2022: 42%). For H1 2023, tax on the profit for the period was an expense of DKK 74 million (2022: DKK 32 million), with an effective tax rate of 33% (2022: 41%). Before restatement for hyperinflation, the effective tax rate was 25% (2022: 25%) for Q2 2023 and 25% (2022: 24%) for H1 2023. For Q2 2023, the profit after tax increased to DKK 58 million (2022: DKK 21 million) and for H1 2023 to DKK 148 million (2022:DKK 46 million).

Discontinuing operations

The net result from discontinuing operations amounted to a loss of DKK 51 million (2022: loss of DKK 74 million)

Profit margin

0 5 10 15 20 25 Q2 2021 Q4 2021 Q2 2022 Q4 2022 Q2 2023

Americas Eurasia Operating profit Profit margin excl. restatement for hyperinflation (rolling 12 months)

in Q2 2023 and a loss of DKK 46 million (2022: loss of DKK 73 million) in H1 2023. The loss in both Q2 and H1 2023 as well as in the comparison period was related to impairment of the Russian entity, see note 6 on page 23.

Comprehensive income

In Q2 2023, comprehensive income came to DKK 6 million (2022: DKK 53 million) and to DKK 91 million (2022: DKK 105 million) in H1 2023.

Events after the balance sheet date

12 July 2023, an extraordinary general meeting, convened upon request from the majority shareholder (cf. company announcements no. 8 and 9 of 19 and 20 June 2023, respectively), elected two new board members, Henrik Marinus Pedersen and Marianne Schelde. At the same time Jan Klarskov Henriksen, Jan Madsen and Pernille Fabricius resigned from the board. Henrik Marinus Pedersen was appointed chairman of the board of directors, and Michael Strange Midskov, elected at the ordinary general meeting in April 2022, was appointed vice chairman, cf. company announcement no. 10 of 12 July 2023.

8 August 2023, cf. company announcement no. 13, Hartmann announced the appointment of Kenneth Kongsgaard Kristensen as new CFO with immediate effect. Company announcement no. 11 of 21 July 2023 informed that Flemming Steen, previous CFO and member of the executive board, would step down immediately by mutual agreement with the board to pursue challenges outside Hartmann.

INTERIM REPORT H1 13 2023 HARTMANN

%

Statement of comprehensive income

DKKm	Note	Q2 2023	Q2 2022	H1 2023	H1 2022
Revenue		804.2	793.8	1,717.3	1,546.3
Production costs		(557.6)	(604.1)	(1,166.7)	(1,184.2)
Gross profit		246.6	189.7	550.6	362.1
Other operating income		0.8	0.0	3.7	0.0
Selling and distribution costs		(102.0)	(109.3)	(217.2)	(209.0)
Administrative expenses		(37.9)	(34.6)	(76.7)	(73.0)
Operating profit		107.5	45.8	260.4	80.1
Financial income	4	14.9	8.9	28.8	24.0
Financial expenses	4	(34.0)	(18.0)	(69.0)	(26.1)
Profit before tax		88.4	36.7	220.2	78.0
Tax on profit for the period		(30.9)	(15.3)	(72.5)	(31.8)
Profit from continuing operations		57.5	21.4	147.7	46.2
Result from discontinuing operations	6	(50.6)	(73.9)	(46.4)	(72.7)
Profit/(loss) for the period		6.9	(52.5)	101.3	(26.5)
Earnings per share, continuing operations, DKK		8.3	3.1	21.4	6.7
Diluted earnings per share, continuing operations, DKK		8.3	3.1	21.4	6.7
Earnings per share, DKK		1.0	(7.6)	14.6	(3.8)
Diluted earnings per share, DKK		1.0	(7.6)	14.6	(3.8)

DKKm	Q2 2023	Q2 2022	H1 2023	H1 2022
Profit/(loss) for the period	6.9	(52.5)	101.3	(26.5)
Items that will be reclassified to profit or loss
Foreign exchange adjustment of foreign subsidiaries	(20.5)	73.3	(54.3)	77.2
Equity-like loans to subsidaries	(2.7)	15.7	(5.4)	14.2
Tax on equity-like loans to subsidiaries	(0.1)	(3.4)	0.5	(3.1)
Hyperinflation restatement of equity at beginning of period	27.1	21.5	55.2	40.4
Fair value adjustments of hedging instruments:
Recognised in other comprehensive income	(3.4)	(6.8)	(6.7)	(4.5)
Transferred to revenue	0.6	2.6	2.9	5.7
Transferred to production costs	(3.7)	2.0	(5.3)	2.5
Transferred to financial income and expenses	0.9	(0.3)	0.7	(0.4)
Tax on hedging instruments	1.1	0.6	1.7	(0.8)
Other comprehensive income after tax	(0.7)	105.2	(10.7)	131.2
Comprehensive income	6.2	52.7	90.6	104.7

Cash flows

Investments and cash flows

Cash flows from operating activities rose to a net inflow of DKK 168 million in Q2 2023 (2022: net inflow of DKK 70 million). In H1 2023, cash flows from operating activities amounted to a net inflow of DKK 310 million (2022: net inflow of DKK 56 million). The development in both Q2 and H1 2023 was driven by increased operating profit and positive impact from changes in working capital compared to same period last year.

In Q2 2023, cash flows from investing activities increased to a net outflow of DKK 56 million (2022: net outflow

of DKK 41 million). H1 2023 cash flows from investing activities increased to a net outflow of DKK 121 million (2022: net outflow of DKK 75 million). The increase compared to 2022 was driven by re-establishment of the factory in India.

The group's cash flows from operating and investing activities (free cash flow) came to a net inflow of DKK 112 million in Q2 2023 (2022: net outflow of DKK 28 million) and a net inflow in H1 2023 of DKK 189 million (2022: net outflow of DKK 20 million.

In Q2 2023, the group's cash flows from financing activities were a net outflow of DKK 93 million (2022: net outflow of DKK 7 million) and a net outflow in H1 2023 of DKK 187 million (2022: net outflow of DKK 95 million). The development was mainly related to repayment of debt.

Cash flows from operating activities Cash flows from investing activities Free cash flow

Cash flows from operating activities Cash flows from investing activities Cash flows from operating and investing activities

INTERIM REPORT H1 15 2023 HARTMANN

Statement of cash flows

DKKm	Note	Q2 2023	Q2 2022	H1 2023	H1 2022
Operating profit before special items		107.5	44.1	260.4	80.1
Depreciation and amortisation		43.8	42.5	87.2	83.9
Adjustment for other non-cash items		2.0	6.2	4.5	12.5
Change in working capital etc.		38.4	(10.9)	0.8	(83.5)
Cash generated from operations		191.7	81.9	352.9	93.0
Interest etc. received		5.4	1.1	7.0	2.2
Interest etc. paid		(15.1)	(8.4)	(30.8)	(15.7)
Net income tax paid		(14.2)	(5.0)	(18.9)	(24.0)
Cash flows from operating activities		167.8	69.6	310.2	55.5
Acquisition of intangible assets		(0.3)	(0.2)	(5.8)	(0.6)
Acquisition of property, plant and equipment		(57.1)	(46.2)	(116.4)	(79.8)
Disposal of intangible assets and property, plant and equipment		1.2	5.1	1.2	5.4
Cash flows from investing activities		(56.2)	(41.3)	(121.0)	(75.0)
Cash flows from operating and investing activities
(free cash flow)		111.6	28.3	189.2	(19.5)
Raising of debt with credit institutions		100.0	0.0	100.0	104.4
Repayment of debt to credit institutions		(190.0)	(2.8)	(280.2)	(2.8)
Change in leasing debt		(3.4)	(4.9)	(7.1)	(6.2)
Cash flows from financing activities		(93.4)	(7.7)	(187.3)	95.4
Net cash flow from continuing operations		18.2	20.6	1.9	75.9
Net cash flow from discontinuing operations	6	(1.0)	9.0	(2.5)	4.3
Total cash flows		17.2	29.6	(0.6)	80.2

DKKm	Note	Q2 2023	Q2 2022	H1 2023	H1 2022
Total cash flows		17.2	29.6	(0.6)	80.2
Cash and cash equivalents at beginning of period		89.5	75.8	111.8	26.9
Foreign exchange adjustment		(5.3)	5.8	(9.8)	4.1
Cash and cash equivalents at end of period		101.4	111.2	101.4	111.2
Of which classified as assets held for sale	6	10.7	(24.1)	10.7	(24.1)
Cash and cash equivalents at end of period		90.7	87.1	90.7	87.1
Recognition of cash and cash equivalents at end of period:
Cash		150.7	111.2	150.7	111.2
Overdraft facilities		(60.0)	(24.1)	(60.0)	(24.1)
Cash and cash equivalents at end of period		90.7	87.1	90.7	87.1

The statement of cash flows cannot be derived solely from the published financial information.

Balance sheet and equity

Funding

Hartmann's net interest-bearing debt decreased to DKK 762 million (2022: DKK 991 million) at 30 June 2023. The decrease was attributable to repayment of debt.

Financial resources, comprising cash and undrawn loan and overdraft facilities, amounted to DKK 522 million at 30 June 2023 (2022: DKK 382 million). This level is considered satisfactory and sufficient to cover Hartmann's planned investments. The loans are subject to standard financial covenants.

Long-term credit institutions have been reclassified to short-term credit institutions as the existing committed loan agreement will expire in May 2024. We expect the refinancing process to be closed before end of December 2023.

Assets

Total assets decreased to DKK 2,828 million (2022: DKK 2,988 million) at 30 June 2023, mainly as a result of write-down of the groups Russian activities classified as assets held for sale.

ROIC

In H1 2023, the return on invested capital increased to 18.9% (2022: 3.4%) following the improved earnings compared to same period last year.

Equity

At 30 June 2023, equity amounted to DKK 1,312 million (2022: DKK 1,301 million), for an equity ratio of 46.7% (2021: 46.2%). The financial gearing ratio decreased to 58.1% (2022: 76.2%) as a result of repayment of debt.

Earnings per share increased to DKK 8.3 for Q2 2023 (2022: DKK 3.1) and DKK 21.4 for H1 2023 (2022: DKK 6.7).

Balance sheet

Assets

DKKm Note	30 June 2023	30 June 2022	31 Dec. 2022
Goodwill	53.9	56.3	54.4
Other intangible assets	60.1	43.7	60.3
Intangible assets	114.0	100.0	114.7
Land and buildings	364.2	409.2	362.1
Plant and machinery	840.9	906.3	876.4
Other fixtures and fittings, tools and equipment	20.0	19.5	20.7
Plant under construction	207.8	161.9	112.7
Property, plant and equipment	1,432.9	1,496.9	1,371.9
Leased land and buildings	49.8	58.3	55.1
Other lease assets	6.9	9.6	8.2
Lease assets	56.7	67.9	63.3
Investments in associates	2.9	2.6	2.9
Other investments	14.0	14.0	14.0
Deferred tax	65.9	61.2	63.2
Other receivables	0.9	0.9	0.8
Other non-current assets	83.7	78.7	80.9
Non-current assets	1,687.3	1,743.5	1,630.8
Inventories	352.0	361.3	327.6
Trade receivables	456.8	458.4	459.5
Income tax	6.9	27.8	24.2
Other receivables	133.1	97.0	209.2
Prepayments	24.4	20.1	25.5
Cash	150.7	111.2	180.2
Current assets	1,123.9	1,075.8	1,226.2
Assets held for sale 6	10.7	168.2	91.5
Assets	2,821.9	2,987.5	2,948.5

Equity and liabilities

	30 June 2023	30 June 2022	31 Dec. 2022
	140.3	140.3	140.3
	(7.1)	(5.3)	(0.4)
	(153.0)	(77.3)	(149.0)
	1,332.2	1,243.5	1,230.9
	1,312.4	1,301.2	1,221.8
	62.6	46.1	60.3
	19.6	8.4	20.3
5	-	895.6	860.3
5	47.9	59.2	53.4
	0.3	0.4	0.3
	0.4	0.8	0.6
	130.8	1,010.5	995.2
5	792.6	111.6	105.5
5	12.3	12.2	13.5
	0.2	0.5	0.1
5	60.0	24.1	85.0
	18.4	57.6	17.5
	266.5	264.9	319.7
	6.3	7.9	9.2
	41.7	4.9	12.2
	0.3	0.3	0.3
	180.4	158.8	150.1
	1,378.7	642.8	713.1
	1,509.5	1,653.3	1,708.3
6	0.0	33.0	18.4
	2,821.9	2,987.5	2,948.5
	Note

Statement of changes in equity

Group			2023			2022
DKKm	Share capital	Hedging reserve	Translation reserve*	Retained earnings	Proposed dividend	Total equity	Share capital	Hedging reserve	Translation reserve*	Retained earnings	Proposed dividend	Total equity
Equity at 1 January	140.3	(0.4)	(149.0)	1,230.9	0.0	1,221.8	140.3	(7.8)	(206.0)	1,270.0	0.0	1.196.5
Profit for the period	-	-	-	101.3	-	101.3	-	-	-	(26.5)	-	(26.5)
Other comprehensive income
Items that will be reclassified to profit or loss
Foreign exchange adjustments of foreign subsidiaries	-	-	(54.3)	-	-	(54.3)	-	-	77.2	-	-	77.2
Equity-like loans to subsidaries	-	-	(5.4)	-	-	(5.4)	-	-	14.2	-	-	14.2
Tax on equity-like loans to subsidiaries	-	-	0.5	-	-	0.5	-	-	(3.1)	-	-	(3.1)
Hyperinflation restatement of equity at 1 January	-	-	55.2	-	-	55.2	-	-	40.4	-	-	40.4
Value adjustment of hedging instruments:
Recognised in other comprehensive income	-	(6.7)	-	-	-	(6.7)	-	(4.5)	-	-	-	(4.5)
Transferred to revenue	-	2.9	-	-	-	2.9	-	5.7	-	-	-	5.7
Transferred to production costs	-	(5.3)	-	-	-	(5.3)	-	2.5	-	-	-	2.5
Transferred to financial income and expenses	-	0.7	-	-	-	0.7	-	(0.4)	-	-	-	(0.4)
Tax on hedging instruments	-	1.7	-	-	-	1.7	-	(0.8)	-	-	-	(0.8)
Other comprehensive income	0.0	(6.7)	(4.0)	0.0	0.0	(10.7)	0.0	2.5	128.7	0.0	0.0	131.2
Total comprehensive income	0.0	(6.7)	(4.0)	101.3	0.0	90.6	0.0	2.5	128.7	(26.5)	0.0	104.7
Changes in equity in the year	0.0	(6.7)	(4.0)	101.3	0.0	90.6	0.0	2.5	128.7	(26.5)	0.0	104.7
Equity at 30 June	140.3	(7.1)	(153.0)	1,332.2	0.0	1312.4	140.3	(5.3)	(77.3)	1,243.5	0.0	1,301.2

* Translation reserve includes reserve for foreign exchange adjustment of foreign subsidiaries and hyperinflation restatement of non-monetary balance sheet items for the Argentinian activities.

01 Accounting policies

The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU and Danish disclosure requirements for listed companies. Condensed interim financial statements have not been prepared for the parent company. The condensed consolidated interim financial statements are presented in Danish kroner (DKK), which is the presentation currency used for the group's operations and the functional currency of the parent company.

The condensed consolidated interim financial statements contain selected accounting policies and should therefore be read in conjunction with the consolidated financial statements for 2022. The accounting policies applied in the condensed consolidated interim financial statements are consistent with the accounting policies applied in the consolidated financial statements for 2022 as described in note 1.

New financial reporting standards and interpretations in 2023

Hartmann has implemented all new and revised financial reporting standards and interpretations adopted by the EU that are effective for financial years beginning on 1 January 2023. The implementation of these changes has not resulted in any changes to the accounting policies.

02 Significant accounting estimates and judgments

In applying the group's accounting policies, management is required to make judgments, estimates and assumptions concerning the carrying amount of assets and liabilities which cannot be immediately inferred from other sources.

The judgments, estimates and assumptions made are based on historical experience and other relevant factors which management considers reasonable under the circumstances, but which are inherently uncertain and unpredictable. Estimates and underlying assumptions are assessed on an ongoing basis.

Changes to accounting estimates are recognised in the reference period in which the change occurs and in future reference periods if the change affects both the period in which the change occurs and subsequent reference periods.

Reference is made to note 3 to the consolidated financial statements in the annual report for 2022 for a full description of significant accounting estimates, assumptions and uncertainties

The Russian invasion of Ukraine further augmented the heightened volatility in the global supply chains, which impacted the first six months of 2023 after having prevailed since the end of the financial year 2021.

The decision to sell the Russian entity was made on 1 April 2022, and the sales process has subsequently been initiated. On the balance sheet date, the Russian entity is treated and measured as discontinuing operations. Hartmann will continue to operate the facilities and fulfil obligations within the limits of imposed sanctions and restrictions until a sale is made.

Management has assessed the potential impact from the resulting uncertainties on the estimated values for the liabilities and assets in the group's Russian entity as well as other potentially affected assets and liabilities.

By the nature, the updated key accounting estimates contain uncertainties, and it is possible that the outcomes in the next financial period can differ from those on which management's estimates are based.

Other matters

Due to seasonal fluctuations in Hartmann's packaging sales, core business revenue and operating profit are generally higher in Q1 and Q4.

In autumn 2019, the Brazilian tax authorities raised a claim of BRL 56 million against Hartmann's Brazilian subsidiary, Sanovo Greenpack Embalagens Do Brasil Ltda., concerning the non-payment of industrial products tax (IPI) on sales of the company's products in 2015 and 2016. Accumulated calculated interests and fines related to the claim up until June 2023 not claimed by the tax authorities is estiated to BRL 14 million leading to a total

estimated claim of BRL 70 million, corresponding to DKK 98 million. The tax authorities have not raised any claims against Hartmann's Brazilian subsidiary for the subsequent years 2017-2022.

Based on judicial practice and statements from its legal and tax advisers, Hartmann is of the opinion that the company's products are not liable to IPI tax and accordingly considers the claim to be unjustified. Hartmann therefore disputes the claim but acknowledges that the case is complicated and that the legal proceedings are to take place in a complex judicial environment. Based on that Management underline, that the outcome is subject to a degree of uncertainty.

There was no significant development in the case in H1 2023. A lenghty process is expected before the case will be finally settled.

Hartmann has not recognised any provision and as such the claim has not affected the company's financial position, result of operations or cash flows.

03 Segment information

			2023			2022
DKKm		Eurasia		Americas		Total reporting segments		Eurasia		Americas	Total reporting segments
	Q2	H1	Q2	H1	Q2	H1	Q2	H1	Q2	H1	Q2	H1
External revenue	447.3	972.7	357.5	747.1	804.8	1,719.8	447.5	891.0	339.0	646.9	786.5	1,537.9
Hyperinflation restatement of revenue					(0.6)	(2.5)					7.2	8.4
Revenue, as per statement of comprehensive income					804.2	1,717.3					793.7	1,546.3
Operating profit for reporting segments	58.3	149.8	61.0	136.0	119.3	285.8	36.0	59.3	25.9	51.6	61.9	110.9
Non-allocated corporate functions					(8.8)	(19.1)					(7.4)	(15.3)
Eliminations					1.1	2.3					0.9	2.0
Operating profit					111.6	269.0					55.4	97.6
Hyperinflation restatement of operating profit					(4.1)	(8.6)					(9.6)	(17.5)
Operating profit before special items, as per statement of comprehensive income					107.5	260.4					45.8	80.1
Special items					0.0	0.0					0.0	0.0
Operating profit after special items, as per statement of comprehensive income					107.5	260.4					45.8	80.1
Financial items					(19.1)	(40.2)					(9.1)	(2.1)
Profit before tax, as per statement of comprehensive income					88.4	220.2					36.7	78.0
Segment assets	-	1,635.2	-	993.9	-	2,629.1	-	1,586.3	-	1,122.8	-	2,709.1
Hyperinflation restatement of non-monetary items					-	84.2					-	74.4
Non-allocated assets					-	319.6					-	252.1
Eliminations					-	(221.7)					-	(216.3)
Assets held for sale					-	10.7					-	168.2
Assets, as per balance sheet					-	2,821.9						2,987.5
Other segment information
Depreciation and amortisation	22.8	45.4	17.5	35.2			23.2	45.5	19.2	36.8
Investments in intangible assets, property plant and equipment and lease assets	-	94.8	-	24.9			-	32.7	-	46.6
Net working capital	-	444.4	-	161.2			-	377.3	-	186.7
Invested capital	-	1,302.0	-	817.0			-	1,203.5	-	990.1

04 Financial income and expenses

DKKm	Q2 2023	Q2 2022	H1 2023	H1 2022
Interest income, cash and cash equivalents etc.	4.0	0.6	5.4	1.2
Other interest income	1.4	0.7	1.6	1.3
Interest income from financial assets
not measured at fair value through profit or loss	5.4	1.3	7.0	2.5
Monetary gain on hyperinflation restatement	0.0	1.2	0.0	9.1
Foreign exchange gains	9.3	5.8	21.3	11.7
Derivative financial instruments	0.2	0.6	0.5	0.7
Financial income	14.9	8.9	28.8	24.0
Interest expenses, credit institutions	13.0	8.6	26.2	14.8
Interest expenses, lease liabilities	0.6	0.6	1.2	1.2
Other financial expenses	1.6	0.4	3.5	1.2
Interest expenses from financial liabilities
not measured at fair value through profit or loss	15.2	9.6	30.9	17.2
Monetary loss on hyperinflation restatement	13.2	0.0	23.2	0.0
Foreign exchange losses	4.5	8.1	13.7	8.6
Derivative financial instruments	1.1	0.3	1.2	0.3
Financial expenses	34.0	18.0	69.0	26.1
Financial income and (expenses)	(19.1)	(9.1)	(40.2)	(2.1)

05 Financial instruments

	30 June 2023		30 June 2022		31 December 2022
Financial instrument categories DKKm	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount	Fair value
Derivative financial instruments to hedge future cash flows	11.6	11.6	1.3	1.3	14.5	14.5
Financial assets used as hedging instruments	11.6	11.6	1.3	1.3	14.5	14.5
Trade receivables	456.8	456.8	458.4	458.4	459.5	459.5
Other receivables	128.4	128.4	123.1	123.1	218.9	218.9
Cash	150.7	150.7	111.2	111.2	180.2	180.2
Loans and receivables	735.9	735.9	692.7	692.7	858.6	858.6
Derivative financial instruments to hedge future cash flows	21.9	21.9	8.1	8.1	15.9	15.9
Financial liabilities used as
hedging instruments	21.9	21.9	8.1	8.1	15.9	15.9
Credit institutions and overdraft facilities	852.6	852.6	1,031.3	1,031.3	1,050.8	1,050.8
Lease liabilities	60.2	77.9	71.4	83.2	66.9	76.2
Other liabilities	473.0	473.0	427.9	427.9	475.3	475.3
Financial liabilities measured at amortised cost	1,385.8	1,403.5	1,530.6	1,542.4	1,593.0	1,602.3

The fair value of derivative financial instruments to hedge future cash flows is based on observable data (level 2).

06 Discontinued operations

On 1 April 2022, Hartmann announced that a sales process for Hartmann's Russian business unit was initiated following Russia's invasion of Ukraine, as the current political and economic climate prevents the realisation of Hartmann's business plan in the country.

JSC Hartmann-Rus is presented as discontinuing operations and assets held for sale and consequently presented separately in the statement of comprehensive income, statement of cash flows and balance sheet.

Being classified as discontinuing operations, the entity is no longer included in the Eurasia segment.

Following the classification as assets held for sale the net assets in the Russian business unit were measured at fair value less cost to sell, resulting in an impairment for a total of DKK 117 million as of 31 December 2022. The fair value was reassessed again as of 30 June 2023 resulting in an additional impairment of DKK 55 million and the fair value less cost to sell is now estimated to be the value of cash DKK 10.7 million.

There is no official valuation guidance for companies wanting to exit Russia, however, the valuation is reduced to the value of cash as of 30 June 2023 in the Russian business unit as uncertainties arising from the political situation in Russia as well as sanctions and financial restrictions have resulted in extremely high uncertainty as to whether any potential proceeds from a sale can be transferred to Hartmann.

The fair value is recognised in local currency and has been translated into the group's presentation currency (DKK) at the official exchange rate as of 30 June 2023. Any adjustments to the consolidated value of the Russian business unit due to changes in the exchange rate have been recognised in other comprehensive income and included in the translation reserve within equity.

On completion of divestment at the current valuation, the currency translation within equity related to the Russian business unit will be classified from equity to the statement of comprehensive income and included as financial income and expenses in the result from discontinuing operations. As of 30 June 2023, the accumulated currency translation reserve amounted to a profit of around DKK 25 milllion including after-tax currency adjustment on the equity loan.

Hartmann will continue to operate the facility and fulfill obligations within the limits of imposed sanctions and restrictions until the entity is sold. The current deadline imposed by the EU for completing a transaction is 31 December 2023. The

efforts to divest the factory have been impacted by complex legal changes and challenges related to Russian as well as EU legislations and sanctions and the ease of completing a transaction is deteriorating. Thus there is a risk that a transaction cannot be completed before the deadline. Furthermore, there is a risk of the Russian authorities taking over the administration of Hartmann's assets either temporarily or permanently. At this time, Hartmann remains in control of its operation and ongoing divestment efforts continue.

Profit and loss from JSC Hartmann-Rus is specified below:

Profit and loss	Q2 2023	Q2 2022	H1 2023	H1 2022
Revenue Expenses	25.3 (19.9)	31.6 (25.7)	51.0 (41.0)	54.6 (45.3)
Depreciation/amortization and impairment	(55.1)	(83.7)	(55.1)	(85.4)
Financial items, net	0.1	4.0	0.2	3.7
Profit before tax	(49.6)	(73.8)	(44.9)	(72.4)
Tax on profit for the period	(1.0)	(0.1)	(1.5)	(0.3)
Profit for the period	(50.6)	(73.9)	(46.4)	(72.7)
Earnings per share	(7.3)	(10.7)	(6.7)	(10.5)

Net cash flows incurred by JSC Hartmann-Rus are, as follows:

Cash flows	Q2 2023	Q2 2022	H1 2023	H1 2022
Operating activities	3.2	9.6	2.6	11.5
Investment activities	(4.2)	(0.7)	(5.1)	(7.2)
Financing activities	0.0	0.0	0.0	0.0
Net cash flow	(1.0)	8.9	(2.5)	4.3

06 Discontinued operations – continued

The major classes of assets and liabilities of JSC Hartmann-Rus classified as held for sale are, as follows:

Balance sheet	30 June 2023	30 June 2022	31 Dec 2022
Assets
Intangible assets	0.0	23.0	10.2
Property, plant, and equipment	0.0	102.1	48.7
Inventory	0.0	7.8	6.4
Receivables	0.0	11.1	9.5
Cash	10.7	24.2	16.7
Assets held for sale	10.7	168.2	91.5
Liabilities
Deferred tax	0.0	11.5	1.4
Other liabilities	0.0	21.5	17.0
Liabilities related to assets held for sale	0.0	33.0	18.4

07 Events after the balance sheet date

12 July 2023, an extraordinary general meeting, convened upon request from the majority shareholder (cf. company announcements no. 8 and 9 of 19 and 20 June 2023, respectively), elected two new board members, Henrik Marinus Pedersen and Marianne Schelde. At the same time Jan Klarskov Henriksen, Jan Madsen and Pernille Fabricius resigned from the board, Henrik Marinus Pedersen was appointed chairman of the board of directors, and Michael Strange Midskov, elected at the ordinary general meeting in April 2022, was appointed vice chairman, cf. company announcement no. 10 of 12 July 2023.

8 August 2023, cf. company announcement no. 13, Hartmann announced the appointment of Kenneth Kongsgaard Kristensen as new CFO with immediate effect. Company announcement no. 11 of 21 July 2023 informed that Flemming Steen, previous CFO and member of the executive board, would step down immediately by mutual agreement with the board to pursue challenges outside Hartmann.

Hyperinflation in Argentina (unaudited)

Inflation and exchange rate developments in Argentina Effects of restating year-to-date revenue

Effects of restating for hyperinflation on selected accounting figures

DKKm	Excl. IAS 29	Price index	Re translation	Total adjustment	2023 to date
Revenue	1,720	30	(33)	(3)	1,717
Operating profit before depreciation	352	8	(12)	(4)	348
Operating profit	269	2	( 11)	( 9)	260
Net financial items	(16)	(29)	5	(24)	(40)

* Restatement for hyperinflation is made based on Argentina's Wholesale Price Index up to 31 December 2016 and on the National Consumer Price Index from 1 January 2017.

The total effect on H1 2023 revenue of restating for hyperinflation under IAS 29 is a combination of restating for price index developments and the effect of using the exchange rate at the balance sheet date for purposes of translating from the Argentine peso into Danish kroner.

The price index rose by 44% during the first six months of the year, boosting revenue by DKK 30 million. The increase was offset by a decline in the ARS/DKK cross rate from 0.03937 at the beginning of the year to 0.02670 at 30 June 2023 reducing revenue by DKK 33 million as a result of the practice of using the exchange rate at the balance sheet date for currency translation purposes.

Revenue was DKK 1,717 million after a net negative impact of restating for hyperinflation of DKK 3 million.

Hartmann at a glance

Hartmann is the world's leading manufacturer of moulded-fibre egg packaging, a market-leading manufacturer of fruit packaging in South America and India and the world's largest manufacturer of technology for the production of moulded-fibre packaging. Founded in 1917, Hartmann's market position builds on its strong technology know-how and extensive experience of sustainable moulded-fibre production dating back to 1936.

Sustainability

Sustainability and protection of the environment are integral components of Hartmann's business model and strategy. All Hartmann's products are based on recycled paper, which is a renewable and biodegradable resource. Working closely with customers to accommodate demand for sustainable products in the retail industry, Hartmann was the first manufacturer to offer both FSC-certified and CO2 -neutral retail packaging.

Markets

Hartmann's key markets are Europe, South America and North America, where the group has strong market positions. Hartmann is a market leader in Europe and in South America and India, where its product portfolio also includes fruit packaging. Hartmann claims a growing share of the North American market and also sells machinery and technology in selected markets.

Products and customers

Hartmann sells egg and fruit packaging to manufacturers, distributors and retail chains, which are increasingly demanding sustainable packaging solutions and specialised marketing expertise. Hartmann's versatile product portfolio is customised to accommodate customer and consumer needs in each individual market. Hartmann sells machinery and technology to manufacturers of moulded-fibre packaging in selected markets.

Production

Hartmann's production platform consists of 15 factories in Europe, Israel, North and South America, India and Russia (discontinuing). Hartmann's deep technology know-how and extensive experience in manufacturing moulded-fibre packaging empower the group to develop and maintain its production platform. Each year, the group manufactures billions of moulded-fibre packaging units and machinery and technology for the manufacturing of packaging.

The Hartmann share

Hartmann's shares have been listed on Nasdaq Copenhagen since 1982 and are included in the Mid Cap index. Hartmann has one class of shares, and each share carries one vote. Financial reports and company announcements may be obtained by subscribing to Hartmann's news service at investor.hartmann-packaging.com.

Financial calendar 2023

15 November 2023 Interim report Q3 2023

This interim report was released in English through Nasdaq Copenhagen as company announcement no. 14/16 August 2023.

All trademarks such as trade names and other names and designations highlighted in this report are trademarks protected and owned by Brødrene Hartmann A/S.

© 2023 Brødrene Hartmann A/S

Brødrene Hartmann A/S

Ørnegårdsvej 18 DK-2820 Gentofte

Tel: (+45) 45 97 00 00 E-mail: investor@hartmann-packaging.com Web: hartmann-packaging.com

Company reg. (CVR) no. 63 04 96 11