H+h International A/s · OMXCOP:HH
H+h International A/s — FY2020 Earnings Presentation
31 slides from H+h International A/s's earnings presentation, Mar 17, 2020
Slide 1: Investor presentation, Danske Bank Winter Seminar
Investor presentation, Danske Bank Winter Seminar 1
Slide 2: Introduction
Introduction Agenda 2020 highlights Strategy execution Sustainability and safety Market outlook Financial review Strategic investments Financial outlook for 2021 Questions & answers H+H is a partner in wall building across Europe H+H is a wall-building materials provider. The core activity is the pr
Slide 3: 2020 financial results: highest-ever profit after tax
2020 financial results: highest-ever profit after tax a testament to strong execution 2020 selected financial figures Figures in DKKm unless otherwise stated. 2019 figures in brackets Organic growth -6% (6%) Capital expenditures 134 (126) (1) Before special tems (2) Netinterest-bearing debt to EBITD
Slide 4: Growth strategy maintained with meaningful strides made in 2020
Growth strategy maintained with meaningful strides made in 2020 Pursuing profitable growth Defending margins and maintaining attractive returns Driving innovation and IT Focus on sustainability and safety * Strong track record as a market consolidator maintained with the acquisition and integration
Slide 5: Successful consolidation efforts and M&A pipeline lifts long-term ROIC target
Successful consolidation efforts and M&A pipeline lifts long-term ROIC target EBIT margin before special items Return on invested capital (ROIC) 2020: 13% 2020: 18% Financial gearing 1-2x 2020: 0.4x Note: The Group's longterm financial targets reflects the ambition to maintain average minimum levels
Slide 6: 2020 marked an important milestone in H+H's sustainability journey
2020 marked an important milestone in H+H’s sustainability journey Sustainability highlights + Committed to joining the UN Global Compact + Release of first stand-alone sustainability report + H+H has provided links to the UN Sustainable Development Goals for which H+H has the most impact * Sustaina
Slide 7: Life-cycle assessment shows products on path to net-zero
Life-cycle assessment shows that H+H’s products are on a path to net-zero— and possibly net-negative—emissions by 2050 Today The path to net-zero || Emissions-reduction : is roadmaps to be a ~| submitted for Science Based Target i approval as soon as = possible ’ a scope son? = — cama ycte sepet soe
Slide 8: Safety in even greater focus in 2020 due to COVID-19 pandemic
Safety in even greater focus in 2020 due to COVID-19 pandemic COVID-19 response Lost-Time Incident Frequency) Throughout the pandemic, H+H has been able to ensure business continuity and improved safety performance through a dedicated focus on Zero Harm and the well-being of the employees (1D) Incid
Slide 9: CWE: positive results from consolidation efforts but market remains fragmented
CWE: positive results from consolidation efforts but market remains fragmented Market conditions and trends Germany’ * Construction market relatively unaffected by COVID-19 during 2020 * Continued challenges from the structural undersupply of housing driven by growing urbanisation and general demogr
Slide 10: UK: strong second half of 2020, fuelled by Government stimuli programmes
UK: strong second half of 2020, fuelled by Government stimuli programmes Market conditions and trends Complete stand-still for three months in early-2020 due to lockdown measures, but strong second half of the year Continued structural undersupply of housing driven by growing population, shortage of
Slide 11: Poland: continued competition and pricing pressure in CSU business
Poland: continued competition and pricing pressure in CSU business due to new entrants Market conditions and trends 2020 was characterised by increased competition and pricing pressure due to new entrants, but H+H was able to mitigate impact through its differentiated product offering The first quar
Slide 12: Resilience plan and risk management help navigating through a turbulent year
Resilience plan and risk management help navigating through a turbulent year Revenue 2,654 2,840 (7%) Cost of goods sold (1,818) (1,963) (7%) Gross profit before special items 836 877 (5%) SG&A and other operating income, net (315) (338) (7%) EBITDA before special items 521 539 (3%) Depreciation, am
Slide 13: Despite strong results in CWE, revenue growth was negatively impacted by UK
Despite strong results in CWE, revenue growth was negatively impacted by UK lock-down measures and softening of Polish market Revenue growth by market Consolidated revenue by quarter DKKm. Bubbles show revenue growth (organic growth) DKKm 2019 1,299 MM 2020 ue 773 76 K 639 a L L ° “ - CWE UK Poland
Slide 14: Financial robustness and scale flexibility allowed H+H to defend margin target
Financial robustness and scale flexibility allowed H+H to defend long-term margin target through pandemic Gross profit and gross profit margin EBITDA and EBITDA margin EBIT and EBIT margin DKKm DKKm DKKm 31% 31% rd 19% 20% ° ° 13% 13% ° o = | 2019 2020 2019 2020 2019 2020 HM Gross profit @ Gross pro
Slide 15: Strong free cash-flow generation to fund continued growth strategy
Strong free cash-flow generation to fund continued growth strategy Free cash flow bridge DKkKm 425 (134) (72) Cash flow from operating activities Capital expenditures Other cash flow from Free cash flow investing activities
Slide 16: Available financing of DKK 1.6bn provides significant firing power
Available financing of DKK 1.6bn provides significant firing power for continued growth journey Net interest-bearing debt (“NIBD”) Available financing DKKm 1,700 (219) _ 230 = 8 NIBD end-2019 Free cash flow IFRS16 impact NIBD related Other, incl. FX — NIBD end- 2024 maturity toacquired 20200 enterpr
Slide 17: Share buy-back programme to be initiated
Share buy-back programme of up to DKK 100 million to be initiated Financial gearing Share buy-back programme NIBD to EBITDA before special items ratio a ' + The Board of Directors has decided to initiate a share buy-back programme of up to H DKK 100 million . ' * The decision is supported by a conti
Slide 18: Larger investments to be made in existing production and sustainability
Larger investments to be made in existing production and sustainability Timely care Sand conversion in the UK Sustainable investments * Since 2011, capital investments have been significantly below depreciation levels * Increasing upsides from additional investments in current CSU plants in Poland *
Slide 19: Financial outlook for 2021
Financial outlook for 2021 0% to 5% 310 to 370 Specific assumptions: The COVID-19 pandemic is not expected to have any material impact on construction activity levels or supply chains Exchange rates, primarily GBP, EUR, and PLN remain at end-February levels Energy and raw material prices increase at
Slide 20: 2020 key take-aways
2020 financial results: highest-ever profit after tax a testament to strong execution 2020 key take-aways * Strong results from continued consolidation efforts + Long-term margin target maintained through pandemic * Increasing focus on ESG, including net-zero emissions target * Share buy-back of up
Slide 21: 2020 Annual Report | Webcast presentation
&A 2020 Annual Report | Webcast presentation
Slide 22: Thank you
Thank you 2020 Annual Report | Webcast presentation
Slide 23: Supplementary information
Supplementary information 2020 Annual Report | Webcast presentation
Slide 24: H+H at a glance
H+H at a glance H+H has 29 factories in Northern and Central Europe witha total annual output of approximately four million cubic metres of wall- building materials. The Group has a leading position in most of its markets. 2020 financial highlights Revenue in DKK millon 2,054 EBIT in DKK milion 332
Slide 25: 2020 performance highlights
2020 performance highlights Selected financial figures and ratios : ~ : : “ : 2 : = : aoa ai on “ a “ : 2 : * Toy : 2,654 “ » 31% = » 138% 8h : Profit after tax in DKKm NIBD/EBITDA before special items ratio Return on invested capital (ROIC) 2020 o 0. no cs 2020 . { 251 -S Sees Ax So 18% «83 NIBD fo
Slide 26: Business model—adding value to customers throughout the wall-building process
Business model—we focus on adding value to our customers throughout the entire wall-building process Quality Manufacturing Value-added Sales Diversified Market Modern and carbon- Trusted partners in Innovative product solutions for friendly products wall building high-rise and low-rise Key raw mater
Slide 27: Equity story
Equity story H+H remains in a unique position for continued growth due to attractive market fundamentals, a differentiated market approach, sustainable products, and proven track record of strategy execution Unique market conditions for growth ~ Structural under-supply of housing + Governmental stim
Slide 28: Consolidated income statement and statement of comprehensive income
Consolidated income statement and statement of comprehensive income Income statement (DKK million) 2020 2019 Statement of comprehensive income (DKK million) 2020 2019 Revenue 2,654 2,840 Profit for the year 251 150 Cost of goods sold (1,818) (1,963) Gross profit before special items 836 877 Other co
Slide 29: Consolidated balance sheet
Consolidated balance sheet Assets (DKK million) 2020 2019 Equity and liabilities (DKK million) 2020 2019 Goodwill 2 196 Share capital 180 180 Customer relations 244 231 Translation reserve (47) (99) Other intangible assets 14 12 Retained earnings 1,405 1,253 Intangible assets 469 439 Equity attribut
Slide 30: Consolidated cash flow statement
Consolidated cash flow statement Cash flow statement (DKK million) 2020 2019 Cash flow statement (continued) (DKK million) 2020 2019 Operating profit (loss) 332 358 Change in borrowings 51 (95) Financial income received 3 1 Debt from acquisitions (15) (3) Financial items, paid (23) (26) Change in le
Slide 31: For further information, please contact
For further information, please contact Andreas Holkjaer Investor Relations and Treasury Manager +45 24 48.03 67 aho@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