Paul Hartmann : Q2 2021 Quarterly Information

INFORM

INFORMATION FOR OUR SHAREHOLDERS FOR THE FIRST HALF YEAR OF 2021

2 Inform first half year 2021 | The HARTMANN GROUP at a glance

THE HARTMANN GROUP AT A GLANCE

The HARTMANN GROUP is one of the leading European providers of professional medical and care products and associated services. Every day, healthcare professionals and patients rely on HARTMANN brands in the core segments of Incontinence Management (e.g. MoliCare®), Wound Management (e.g. Zetuvit®) and Infection Prevention (e.g. Sterillium®). This is expressed in our brand promise of "Helps. Cares. Protects.". Founded in 1818, the company sells with its products and solutions in 130 countries around the world. For the future, the HARTMANN GROUP is currently implementing its strategic Transformation Program with its high-performance,customer-oriented and passionate team.

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Key performance indicators of the HARTMANN GROUP as of June 30

in EUR million. Rounding differences not balanced out

						Change over previous year
		2020		2021		absolutely	in %
Sales revenues	1,234.0		1,153.3		−80.7	−6.5
of which foreign share in %	65.0%		66.1%
Organic sales growth in %	16.1		−5.0
Adjusted EBITDA	130.0		148.2	18.2			14.0
Return on adjusted EBITDA in %	10.5		12.8
Equity ratio in %	56.7		57.9		1.2%-Pt.
Net financial position	26.2		17.7		−8.5	−32.4

CONTENTS OVERVIEW

The HARTMANN GROUP at a glance	2
To our shareholders	3
Business development	4
The HARTMANN share	6
Transformation Program: Realignment of Wound Management production	7
Obituary of former HARTMANN Management Board member Michel Kuehn	9
Additional updates	10
Data protection information	11
Imprint	12

As in the preceding quarters, the coronavirus pandemic has had a significant impact on HARTMANN's business development in the first half of 2021. After a high number of infections and strict contact restrictions in the first months, the situation normalized slightly towards the end of the reporting period, in particular thanks to rising vaccination rates.

This development affected HARTMANN's business in several ways. The positive effects resulting from the coronavirus pandemic, which were clearly visible in 2020, declined considerably in the first half of 2021. In particular, demand for products from the Infection Management segment and personal protective equipment has fallen from the highs of the previous year. At the same time, the negative effects of the pandemic have largely persisted: budget and cost pressures in healthcare systems continue to intensify and are impacting the development of business, as is the still low room occupancy rate in hospitals and nursing homes. Only the slowly increasing number of surgeries towards the end of the first half of the year and the resulting renewed rise in demand for wound care products point to a slight recovery. Further challenges arose due to the indirect increase in costs caused by the coronavirus pandemic: Higher raw material prices had a negative impact on material costs - plus the increased freight and logistics costs.

Overall, the first half of the year was characterized by a decline in sales and earnings compared to the previous quarters, as forecast. Compared to the same period of the previous year, HARTMANN recorded a moderate organic decline in sales of −5.0%. Across all business segments, sales amounted to EUR 1.153 billion. Adjusted EBITDA amounted to EUR 148.2 million and the adjusted EBITDA margin was 12.8%. Despite the challenging market and competitive envi- ronment, HARTMANN continued to steadily pursue its Transformation Program in the first half of 2021 - making solid progress in all key projects. The online nursing portal pflege.de, acquired at the beginning of the year, also progressed very positively.

HARTMANN continuously reviews its planning and forecasts. Based on current calculations, the Company confirms the forecast for the current financial year made in the Annual Report 2020 and continues to assume a moderate organic decline in sales and a declining adjusted EBITDA of EUR 210 to 260 million.

Kind regards and take care!

Britta Fünfstück

4 Inform first half year 2021 | Business development

BUSINESS DEVELOPMENT IN THE FIRST HALF YEAR OF 2021

Effects of the pandemic impact business performance

The impact of the coronavirus pandemic on the HARTMANN GROUP's business development did not significantly diminish in the first six months of financial year 2021. Across all business segments, the Company achieved a sales revenue of EUR 1.153 billion in the first half of the year. The organic decline in sales was −5.0%. If exchange rate effects (−0.6%) and acqui- sitions / divestments (−0.9%) are included, there is a decline in total sales of −6.5%. The decline in sales and earnings compared with the previous quarters thus continued as forecast.

On the one hand, the sales performance shows that the positive effects from the coronavirus pandemic diminished sharply in the first half of the year. In particular, demand for products from the Infection Management segment and personal protective equipment decreased significantly. On the other hand, the negative effects continued to be felt. While budget and cost pressures in healthcare systems continued to increase, room occupancy rates in hospitals and nursing homes remained at a low level. A slight recovery was only discernible as a result of

the recent­ modest increase in the volume of surgeries and the resulting rise in demand for modern wound care products.

Increased expenses for freight and logistics as well as raw

materials­ also had a negative impact on the performance of the business segments.

Decline in demand for Infection Management and slow ­recovery in Wound Management

In the Wound Management segment, HARTMANN generated sales revenues of EUR 234.4 million in the first six months of the year. Here, the rising number of surgeries and the renewed increase in the frequency of doctor and pharmacy visits indicate the beginning of a recovery from the negative impacts of the pandemic on the Wound Management segment. Compared to the first half of 2020, sales (organic) in the Wound Management segment improved by 10.8% as a result.

Sales of HARTMANN products for modern wound care developed particularly positively. These include self-adhesive wound dressings and super absorbent wound dressings. Sales in the area of traditional gauze dressings such as fixation and compression bandages or plasters also made a positive contribution.

Sales in the Incontinence Management segment amounted to EUR 336.4 million in the reporting period. This corresponds to an organic decline in sales of −3.9% compared to the prior-year pe- riod. This development is primarily attributable to the very slow

rise in bed occupancy rates and the associated low demand for care products in hospitals and homes for the elderly. In the

Incontinence­Management segment, growth was driven by ­product solutions for the ambulatory care of incontinent, active people. These include products such as MoliCare® Elastic and MoliCare® Mobile.

The Infection Management segment recorded sales of EUR 373.1 million in the reporting period. This corresponds to an organic decline in sales of −15.3% compared to the prior-year period. The decline is attributable on the one hand to lower demand for products from the Infection Management segment compared with the first half of 2020 and to customers' currently high inventories of hand disinfectant products. On the other hand, demand for personal protective equipment also declined significantly. Only the area of examination gloves continued to show a very positive development. However, this was unable to compensate for the developments of other product groups in the segment.

In the Other Group Activities segment, sales totaled EUR 209.4 million. This corresponds to an organic decline in sales of −1.7% compared to the prior-year period. Here, too, the effects of the pandemic are still having a negative impact. For instance, sports clubs and organizers are still subject to significant restric- tions. One consequence is lower demand for sports injury products such as bandages from KOB. At CMC Consumer Medical Care, reduced demand for cosmetic products led to declining sales. The KNEIPP Group, on the other hand, succeeded very well in catering to the trend towards greater health awareness in the first half of 2021.

Total sales by business segment

in EUR million and percent

		Wound
Other Group Activities		Management
209.4 | 18.2%		234.4 | 20.3%

Infection			Incontinence
Management			Management
373.1 | 32.3%		336.4 | 29.2%

Inform first half year 2021 | Business development

5

European market in decline

Overall, customer sales in the Central, Western, Southern, and Northern Europe regions performed negatively in the first half of 2021. In Central Europe (excluding Germany), there was a sharp organic decline in sales of −11.4%. Only the Eastern Europe region recorded a slight increase in organic sales. With its declining performance of −8.2% compared to the first half of 2020, the core sales market of Germany also contributed to the decline in sales of the HARTMANN GROUP. The domestic share of total sales thus fell to 33.9%. In the Asia, Africa and Oceania region and in the Americas, HARTMANN generated organic sales growth. This played a minor role in the overall sales trend.

Share of total sales by region

in EUR million and percent

Africa, Asia, Oceania		Germany
89.5 | 7.8%		391.2 | 33.9%

America

32.3 | 2.8%

Europe excl. Germany

640.3 | 55.5%

Number of employees in the HARTMANN GROUP

31/12/2020 30/06/2021

4,350

4,398

Germany

	5,324	5,257	Europe excluding
			Germany
	951	967	Outside Europe
Employees	10,625	10,622

Employee numbers stable

As of June 30, 2021, the HARTMANN GROUP employed 10,622 people worldwide. This roughly corresponds to the level at the end of financial year 2020. In Germany, the number of employees grew by 48 (+1.1%) in the first six months of the current financial year. The increase is largely attributable to the acquisition of the online care portal pflege.de. In the European core markets outside Germany, the number of employees fell by 67 (−1.3%). Outside Europe, HARTMANN recorded an increase of 16 employees (+1.7%). This is mainly based on the strengthening of the sales functions in China.

Adjusted EBITDA with continued reduced dynamic

Earnings also continued the downward trend seen in previous quarters, as expected. Adjusted EBITDA was EUR 148.2 million as of June 30, 2021, and the adjusted EBITDA margin was 12.8%.

Equity ratio slightly above prior-year period

At the end of June 2021, HARTMANN's equity ratio of 57.9% was above the prior-year figure of 56.7%. The reduction in the net financial position compared to the end of fiscal 2020 to EUR 17.7 million is mainly due to the acquisition of pflege.de, the dividend payment in accordance with the resolution of the Annual General Meeting, and higher capital tied up in working capital.

Outlook

The uncertain course of the coronavirus pandemic and its economic consequences continue to cause a high degree of forecast uncertainty in the second half of the year. HARTMANN expects a further decline in the still-existing positive effects resulting from the pandemic and anticipates that the negative effects will continue and only ease slowly. In addition, the Company expects freight and logistics costs to increase, in some cases sharply, as well as higher raw material prices and material costs.

Based on current calculations, the Company confirms the forecast for financial year 2021 published in the 2020 Annual Report with a moderate organic decline in sales and a decline in adjusted EBITDA of EUR 210 to 260 million.