H+h International A/s · OMXCOP:HH
H+h International A/s — Q2 2020 Earnings Presentation
30 slides from H+h International A/s's earnings presentation, Aug 14, 2020
Slide 1: Investor presentation Q2 2020
Investor presentation Q2 2020 14 August 2020 Investor presentation, Q2 2020 1
Slide 2: H+H is partner in wall building across Europe
H+H is partner in wall building across Europe Introduction H+H is a wall building materials provider. The core activity is production and sale of autoclaved aerated concrete (AAC or aircrete) and calcium silicate units (CSU or sand lime bricks). The products are building blocks used for wall buildin
Slide 3: Good performance outside UK
Good performance outside UK Q2 key highlights Reintroducing outlook • UK market severely impacted by lockdown • Due to the recovery and more clarity of the UK • Good performance in other markets despite market, H+H reintroduces its financial outlook Covid-19 for 2020 H2 2020 market outlook • Current
Slide 4: Market development and effects from Covid-19: UK severely hit in Q2
Market development and effects from Covid-19 UK severely hit in Q2 UK market development H+H UK • Following measures taken by the UK Government on • H+H halted UK production beginning of April as 23 March 2020 distribution centres and building sites stock levels were high and demand limited. closed
Slide 5: Strategy update: Improved diversification to meet market challenges
Strategy update Improved diversification to meet market challenges UK Other markets 11% 19% Diversified footprint • Three core markets established in recent years – UK, Germany and Poland Q2 2020 • Two product lines – AAC and CSU 40% • Russian business divested in Q4 2019 Germany 31% Poland M&A acti
Slide 6: Good performance in other markets despite lockdowns
Market development and effects from Covid-19 Good performance in other markets despite lockdowns The German market The Polish Market Other markets* • Lockdown did not impact building • Lockdown did not impact building • Lockdown did not impact building sites or distribution centres sites or distribu
Slide 7: Covid-19 response
Covid-19 response Secure health and safety of our employees • Enhanced safety precautions were implemented across all sites focusing on reducing contamination risk. Safety first Contingency actions • Agile capacity planning • Reduction of shifts in UK and Poland • Re-organisation in the Nordics Cont
Slide 8: Key figures
Key figures Q2 Figures H1 figures EBIT(bsi) EBIT margin (bsi) 11% 12% Revenue Revenue 596 57 DKK million 1,300 DKK million last year 114 DKK million 770 last year EBIT(bsi) ROIC 142 18% 16% last year DKK million Free cash flow last year Organic growth of (22)% 108 DKK million Capital expenditure of
Slide 9: Growth in most markets despite Covid-19
Growth in most markets despite Covid-19 Total revenue, DKKm -23% Organic growth of 2% excluding UK 770 779 • Growth down 23% as UK was severely hit by lockdown when 704 625 596 distribution centres and building sites closed • Positive effects from the others markets Good market development in other
Slide 10: Gross margin kept at high level despite UK market in lockdown
Gross margin kept at high level despite UK market in lockdown Gross margin quarters, percentage Q2 gross margin of 30% -1%-point • Q2 negatively affected by lower volumes produced and sold 34% 31% 32% in the UK, offset by efficiency improvements as well as higher 30% 28% prices • Government grants f
Slide 11: Two-digit EBIT margin kept despite market challenges
Two-digit EBIT margin kept despite market challenges EBIT margin (bsi), percentage -5% 18% Q2 2020 EBIT (bsi) impacted by UK lockdown: 15% 12% • Negatively affected by halted production in the UK and 10% 10% limited demand • The Groups other markets contributed positively Q2 2019 Q3 2019 Q4 2019 Q1
Slide 12: NIBD and financial gearing at low levels
NIBD and financial gearing at low levels -9 407 398 NIBD development 9 7 • H1 2020 CAPEX related to maintenance and upgrade projects. Kept at a low level 74 147 5 • Paid for acquired German AAC factory in January and 43 last preferred payment for Grupa Silicaty in Poland NIBD CF CAPEX IFRS 16 Acq. o
Slide 13: Financial overview
Financial overview Q2 Q1-Q2 DKK million 2020 2019 Variance 2020 2019 Variance Actual 596 770 (23%) 1,300 1,436 (9%) Revenue Organic 599 770 (22%) 1,283 1,436 (11%) Gross margin* 30% 31% (1%) 31% 29% 2% EBITDA* 104 156 (52) 234 253 (19) EBIT* 57 114 (57) 142 169 (27) EBIT margin* 10% 15% (5%) 11% 12%
Slide 14: 2020 market outlook - still low visibility for H2
2020 market outlook - still low visibility for H2 H2 2020 market outlook UK drivers for H2 2020 • Due to the recovery and more clarity of the UK market • Help to Buy: Completion requirement extended to H+H reintroduces its outlook for 2020 end of February 2021 • Stamp duty holiday – Threshold raised
Slide 15: Financial outlook reintroduced
Financial outlook reintroduced H+H Group Initial financial Financial Realised in H1 Financial outlook 2020 outlook 2020 2020 outlook 2020 24 March 2020 reintroduced Revenue -2 to 2% Suspended -11 % -16 to -8 % EBIT DKK 300-360m Suspended DKK 142m DKK 250-300m CAPEX DKK 140-180m Suspended DKK 43m DKK
Slide 16: Q&A
Q&A Investor presentation, Q2 2020 14 August 2020 16
Slide 17: Thank you
Thank you H+H International A/S Lautrupsgade 7, 5th Floor 2100 Copenhagen Ø Denmark +45 35 27 02 00 info@hplush.com www.hplush.com Investor presentation, Q2 2020 14 August 2020 17
Slide 18: Appendices
Appendices Investor presentation, Q2 2020 14 August 2020 18
Slide 19: Revenue allocation Q1 2020
Revenue allocation Q1 2020 Product split revenue 32% Calcium silicate 68% Aircrete (CSU) (AAC) Gross profit split: CSU 27% / AAC 73% Revenue share 25% Revenue share 30% Revenue share 30% Strong market positions United Kingdom (31%) Germany (25%) Poland (27%) Other markets (15%) Sales and Administrat
Slide 20: Long term financial targets
Long term financial targets H+H expects to use free cash flow to develop the existing business and execute on the pipeline of strategic growth initiatives. EBIT Return on invested capital (ROIC) Financial gearing EBIT ROIC Net interest-bearing debt EBIT margin Adjusted ROIC Financial gearing 13% 20%
Slide 21: Performance Highlights
Performance Highlights Revenue and Profit Revenue Gross profit and gross margin EBIT and EBIT margin Revenue Gross profit EBIT Organic growth Gross margin EBIT margin 2,840 31% 13% Revenue in DKKm Gross margin before special items EBIT margin before special items EBIT in 2018 was affected by a one-o
Slide 22: Business model – We focus on adding value to our customers
Business model – We focus on adding value to our customers throughout the entire wall building process Quality Manufacturing Value-added Sales Diversified Market Quality products of nature’s own material Trusted partners in wall building Innovative product solutions for high-rise and low-rise Key ra
Slide 23: Equity story
Equity story 1. European market leading 2. Unique market conditions 3. M&A – Proven track record position in AAC and CSU products for growth of strategy execution Top 2 positions in all key markets Structural under-supply of housing Fragmented markets with room for market share gains and consolidati
Slide 24: Top six risks
Top six risks Investor presentation, Q2 2020 14 August 2020 24
Slide 25: Top six risks
Top six risks Investor presentation, Q2 2020 14 August 2020 25
Slide 26: External growth drivers
External growth drivers Macroeconomic Capacity utilisation Demography • GDP growth • Capacity utilisation in the • Urbanisation aircrete and calcium- • Inflation silicate industry • Housing stock • Governmental stimuli • Capacity utilisation in the • Demand for of housebuilding wall building materia
Slide 27: We partner to develop sustainable end-products
Planning Delivery Building Sales We partner to develop sustainable end-products At the end of the day, homes, flats, offices and other buildings need to be comfortable, safe and sustainable. Our wall building solutions have been specially developed to deliver futureproof results. An improved indoor
Slide 28: More than 100 years of experience
More than 100 years of experience European wall building provider as consolidator Turn around Normalisation and expansion H+H as a conglomerate 1909 1958 1962 1985 1998 2000 2005 2008 2009 2010 2011 2015 2018 2019 1937 2003 2017 Henriksen & W. Kähler – established joint gravel pit enterprise Focus o
Slide 29: H+H supports customers from the very early planning stages with a complete range
H+H supports customers from the very early planning stages with a complete range of sustainable wall building solutions, process expertise and guidance on how to optimize the wall building process. Investor presentation, Q2 2020 14 August 2020 29
Slide 30: The new brand claim opens for further opportunities to expand the product portfolio into
The new brand claim opens for further opportunities to expand the product portfolio into other wall building materials. For the time being, restructuring within our existing products in Central Europe is top of the agenda. Investor presentation, Q2 2020 14 August 2020 30