H+h International A/s · OMXCOP:HH
H+h International A/s — Investor Presentation (August 2022)
50 slides from H+h International A/s's investor presentation, August 2022
Slide 1: H+H International A/S Investor presentation
H+H International A/S Investor presentation August 2022
Slide 2: Introduction
Introduction Contents H+H at aglance Equity story Strategic position Geographical footprint Financial position Supplementary information Contact information H+H is a Poriner ip Val) Sulcine across Europe H+H is a wall-building materials provider. The core activity is the production and sale of autoc
Slide 3: H+H at a glance
H+H at a glance H+H is a leading provider of solutions and materials for wall building. Over the recent years, 1+!) has grown significantly through acquisitions and now has a strong and diversified market position across its geographies, serving as a solid foundation for continued growth. Founded in
Slide 4: Unique position for continued growth
We remain in a unique position for continued growth due to unique market conditions, a differentiated market approach, sustainable products and solid strategy execution Unique market conditions for erow! + Structural under-supply of housing + Government commitment and stimuli programmes for housebui
Slide 5: Strategic position
Strategic position |
Slide 6: Structural growth drivers that transcend industries, markets and geographies
Our business is impacted by certain structural growth drivers that transcend industries, markets and geographies 36% The share of the European Union's total CO? emissions coming from buildings. 48% The share of the population in the European Union projected to be living in urban areas by 2050. Sourc
Slide 7: Business model
Business model Resources People We value our workforce, recognise the advantages of diversity and believe in the equality of people Raw materials Our products are made of sand, water and lime, with cement and aluminium added for aircrete Factory network We have created a strong network of factories
Slide 8: Products and wall-building solutions for a variety of projects
Our products and wall-building solutions can be used for a variety of projects Our product range is diverse, and its flexibility allows for various applications. As a result, the customer segments are also diverse and provide a differentiated risk profile. Our products H+H is a provider of building
Slide 9: Aircrete largest share of revenue; more balanced geographical footprint
Aircrete constitutes largest share of revenue, but consolidation efforts have provided a more balanced geographical footprint Revenue by product line Revenue by region Share of total revenue, 2021 Share of total revenue, 2020 2017 2021 2017 2021 I Calcium silicate ("CSU") Ml Aircrete ("AAC") Other)
Slide 10: Partnership is key to managing increasing industry complexity
Partnership is key to managing increasing industry complexity s, involving many different stakeh ith equally Froma distribu and contractors: ork faster, smi e efficiently ied labour mpleting
Slide 11: We are Partners in Wall Building
We are Partners in Wall Building Our homes, flats, offices, and other buildings need to be comfortable, safe and sustainable. Our wall-building solutions have been specifically developed to deliver high-quality and sustainable results. Animproved indoor climate, energy savings due to better thermal
Slide 12: Increasing market penetration in core markets
H+H’s product offering is enjoying increasing market penetration in all of H+H’s core markets Germany United Kingdom Poland Predominantly used wall-building material Predominantly used wall-building material Predominantly used wall-building material Hl H+H product offering) ll Other wall-building ma
Slide 13: Modern and carbon-friendly products
Modern and carbon-friendly products with increasing market penetration 10's, decades or even centuries later than timber ducts have an expected lifetime of 100-150 years te was invented in the early-1 concrete, clay, and bricks. H+H's pi ( +H products offer an improved indoor climate an insulation,
Slide 14: Solid organic-growth rates over recent years
The business has shown solid organic-growth rates over recent years Organic revenue Revenue in local currencies, excluding acquired and divested businesses, DKKm (1) Revenue in 2 15 negatively impacted by the global COVID-19 pandemic and the three-month National lockdown imposed by the British Gover
Slide 15: Growth through profitable acquisitions since 2014
Since 2014, H+H has grown its business considerably through several profitable acquisitions... H+H has a strong track record as a market consolidator. Since 2014, the strategy has been focused on consolidating the European whitestone market with a primary focus on Germany and Poland. Number of facto
Slide 16: Growth without over-leveraging the company
...And has done so without over-leveraging the company Free cash flow Before acquisitions and divestments (DKKm) 320 280 240 200 160 120 80 40 -40 291 265° 236 244 165 38 99 -26 2015 2016 2017 2018 2019 2020 2021 = Q2 2022 Financial gearing Net interest-bearing debt to EBITDA before special items ra
Slide 17: Strong results from consolidation efforts
Strong results from consolidation efforts, with positive impact on margins ro} capacity utilisation in the acquired factories. H+H follows a lean manufacturing approach to S Through effective integration and organisation development, H+H has managed to improve O} improve manufacturing efficiency and
Slide 18: 2021 acquisitions expand German factory network
Acquisitions completed in 2021 provide important expansion of German factory network... Feuchtwangen acquisition sam DOMAPOR acquisition fac + H+H has signed an agreement the shares in DOMAPOR GmbH & C (DOMAPOR") provides true national coverage for e business 2 quisition, H+H will be the only suppli
Slide 19: Opportunity to upgrade the Wittenborn factory
..and they provide the opportunity to upgrade the Wittenborn factory, as expanded factory network minimise impact on production * H+H plans to perform certain upgrades and maintenance on the Wittenborn factory in the Northern part of Germany * Asaconsequence of the upgrades, the Wittenborn factory w
Slide 20: Meeting strong demand while consolidating our platform
Meeting the strong demand while consolidating our platform Central Western Europe The United Kingdom Poland Other geographies Current product portfolio. Aircrete Calcium silicate Maintain mark ugh continued production platform an in organic gy Explore acquisitive growth opportunities in countries ad
Slide 21: Strides towards net-zero emissions
, a Cee Important strides made on our journey towards net-zero emissions 2022 2030 2050 As the first manufacturer of AAC and We commit to reducing absolute scope 1 We commit to achieving net-zero CSU products, H+H committed to an and 2 greenhouse-gas emissions by emissions in our operations and ambi
Slide 22: Roadmap to carbon reductions in line with the Paris Agreement
25% 100% Roadmap to achieve carbon reductions in line with the Paris Agreement (35%) 54% Scope 2019 ba: Organic growth and improvements, net (2019-2030) Tovsonic arom and improvements, net /e expect to grow our business organically. The related increase in emissions will partly be offset by continuo
Slide 23: Summary of strategic targets
Summary of strategic targets Long-term targets Mid-term targets Short-term targets EBIT margin before special items Increased from 11% 14% in 2021 H+H commits to reducing absolute Scope 1 and 2 greenhouse-gas emissions by 46% by 2030 compared with 2019 Organic growth 15% to 20% 13% in 2021 EBIT befo
Slide 24: Geographical footprint
? Geog aphical. | footprint
Slide 25: Our geographical footprint
Our geographical footprint We have a diversified geographical footprint with our activities spread across three core regions, namely the Central Western Europe region (comprising Germany, the Nordics, the Benelux countries, the Czech Republic and Switzerland), the United Kingdom and Poland. We have
Slide 26: Central Western Europe
Central Western Europe 2021 was another solid year for the Central Western Europe in which we continued to see the benefits from our efforts to consolidate the German whitestone markets. These efforts continued in 2021 with the acquisitions of two additional factories which will serve as an importan
Slide 27: The United Kingdom
The United Kingdom 2021 was a very strong year for the British construction industry with activity levels exceeding those of the record year of 2019. The high activity was in part driven by the shorter-term government stimuli programmes, but the longer-term prospects for the industry are strong. Key
Slide 28: Poland
Poland 2021 showed very high activity in the Polish construction markets which translated into strong demand for our AAC and CSU products. We continue to benefit from the market consolidation achieved in 2018 with positive impact on both pricing and sourcing of materials Key market characteristics E
Slide 29: Financial position
Hl 2022 Financial r a,
Slide 30: Q2 2022: strong activity and sales price increases
Q2 2022: strong activity and sales price increases drove solid earnings in high-inflation environment Selected financial figures for Q2 2022 Figures in DKKm unless otherwise stated. Q2 2021 figures in brackets Organic growth Gross margin EBIT margin® 13% 32% 18% (39%) (30%) (15%) Return on Invested
Slide 31: Highest-ever quarterly revenue
Highest-ever quarterly revenue driven by the continued implementation of sales price increases and strong customer demand Consolidated revenue by quarter Quarterly revenue by region DKKm. Bubbles show revenue growth (organic growth) DKKm. Bubbles show revenue growth (organic growth) Pry 720% (+13% +
Slide 32: Highest-ever quarterly revenue (H1)
Highest-ever quarterly revenue driven by the continued implementation of sales price increases and strong customer demand Consolidated H1 revenue H1 revenue by region DKKm. Bubbles show revenue growth (organic growth) DKKm. Bubbles show revenue growth (organic growth) mo Mi H12021 mq MM H12022 cee 1
Slide 33: Strong earnings margins in Q2 2022
Strong earnings margins in Q2 2022 fuelled by sales price increases to counter the inflationary pressure Gross profit and gross profit margin DKKm and percent, respectively 32% 30% ° EBITDA and EBITDA margin DKKm and percent, respectively 23% EBIT and EBIT margin DKKm and percent, respectively 21% °
Slide 34: Solid H1 2022 gross margin and EBITDA and EBIT margins
Solid H1 2022 gross margin and leverage of SG&A drives strong EBITDA and EBIT margins Gross profit and gross profit margin EBITDA and EBITDA margin EBIT and EBIT margin DKKm and percent, respectively DKKm and percent, respectively DKKm and percent, respectively 30% 30% o ° 21% 19% ° ° 15% 13% ° ° 41
Slide 35: Quarterly earnings drove strong free cash-flow generation
Quarterly earnings drove strong free cash-flow generation... Development of free cash flow DKKm ° —_ 165 EBITDA Change in NWC Financial items, net Taxes paid Other) Cash flow from Capital Free cash flow operations expenditures: (1) Other’ comprises change in provisions and pension contribution and o
Slide 36: Decline in net interest-bearing debt and lower financial gearing
..Which in turn drove a decline in net interest-bearing debt and a lower financial gearing Net interest-bearing debt (“NIBD”) Financial gearing DKKm Net interest-bearing debt to EBITDA before special items 4520. 2.0x 350 Long-term financial target of 1-2x EBITDA 15x 10x 07x 06x 05x 05x 2 operations
Slide 37: Financial policy and capital allocation
Financial policy and capital allocation Capital structure The overall objective of H+H's financial policy is to ensure sufficient financial flexibility to meet the Group's strategic objectives and a robust capital structure to maximise the return for H+H's shareholders. The long-term target (i.¢., t
Slide 38: Status on DKK million share buy-back programme
Status on DKK 150 million share buy- back programme + As of 30 June 2022, a total of 403,100 shares, corresponding to 2.3% of the total share capital in H+H, had been bought back under the programme for a total purchase price of DKK 66 million. + Further investments in profitable growth remains the
Slide 39: Financial outlook for the full year 2022 maintained
Financial outlook for the full year 2022 maintained Organic growth EBIT before special items 15% to 20% 440 to 520 Specific assumptions: + Exchange rates, primarily the British pound ("GBP"), the euro ("EUR") and the Polish zloty ("PLN"), are expected to remain at mid-August 2022 levels. * Costs of
Slide 40: Supplementary information
Slide 41: Performance highlights
Performance highlights Revenue and organic growth Gross profit and gross margin before special items EBIT and EBIT margin before special items 7 MM Revenue bekn 94 REI Gross profit bekn % mm ceiTo been % — Organic growth = Gross margin 4,000 24 1200, ——___________ — e8IT margin? 500 6 3,000 16 900 3
Slide 42: Five-year financial summary
Five-year financial summary Income statement (DKK milion) 2021 2020 2019 2018 2017 Financial ratios 2021 2020 2019 2018 2017 Revenue 2,654 2840 2523 1,622 Organic growth (6%) 6% 18% 3% Gross profit before special items 836 877 690 452 Gross margin before special terns 31% 31% 27% 27% EBITDA before s
Slide 43: Board of Directors
Board of Directors Members of the Board of Directors Kajsa von Geijer Kent Arentoft, Chairman Volker Christmann Miguel Kohimann Helen Mac ni sstainabilty of Group Managem sssional board n Vice Presic sor Global Finan: Chairman of DS utive Chairman, Home ‘S and sub: s Feder and (Denmark) Board of Di
Slide 44: Executive Management Team
Executive Management Team -— Executive Board Michael Troensegaard Andersen Peter Klovgaard-Jargensen Chiet Executive Oficer since 2011 Chief Financial Officer since 201 r— Senior Executives Peter Lidstone Chief Operating Officer since 2016 Bjarne Pedersen Chiet Strate 2019 Danish, Born 196) D ent in
Slide 45: Shareholder information
Shareholder information H+H International A/S is listed on the Nasdaq Copenhagen stock exchange and is trading under the ticker symbol, HH. Inquiries concerning investor relations issues should be addressed to the Head of Investor Relations and Treasury via email to Shareholder@HplusH.com Share info
Slide 46: Condensed consolidated income statement
Condensed consolidated income statement Income statement (DKK million) Revenue Cost of goods sold Gross profit before special items. Sales costs Administrative costs Other operating income and costs, net EBITDA before special items Depreciation, amortisation and impairment losses EBIT before special
Slide 47: Condensed consolidated statement of comprehensive income
Condensed consolidated statement of comprehensive income Statement of comprehensive income (DKK million) 22021 11.2021 Full year 2021 Profit for the period 142 321 Items that may be reclassified subsequently to profit or loss: Foreign exchange adjustments, foreign entities 10 9 10 9 Items that will
Slide 48: Condensed consolidated balance sheet
Condensed consolidated balance sheet Assets (DKK million) 31 Dec. 2021 30 Jun. 2021 Equity and liabilities (DKK million) 31 Dec. 2021 30 Jun. 2021 Non-current assets Equity Goodwill 364 2 Share capital 180 180 Other intangible assets 296 248 Retained earnings 1,662 1,540 Property, plant and equipmen
Slide 49: Condensed consolidated cash flow statement
Condensed consolidated cash flow statement Cash flow statement (DKK million) Operating profit (loss) Financial income, received Financial items, paid Depreciation and amortisation Gain and losses on sale of assets and other non-cash effects Change in working capital Change in provisions and pension
Slide 50: For further information, please contact
For further information, please contact Peter Klovgaard-Jorgensen Chief Financial Officer +45 3527 0200 Shareholder@HplusH.com H+H International A/S. Lautrupsgade 7, 5th Floor 2100 Copenhagen & Denmark +45 35 27 02 00 info@hplush.com www.hplush.com,
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