H+h International A/s · OMXCOP:HH
H+h International A/s — FY2019 Earnings Presentation
27 slides from H+h International A/s's earnings presentation, Mar 11, 2020
Slide 1: Investor presentation FY 2019
Investor presentation FY 2019 11 March 2020 1
Slide 2: Introduction
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: Highlights FY 2019
Highlights FY 2019 Revenue EBITDA before special items Acquisitions and divestments Investments DKK million DKK million 539 Capital expenditure of 2,840 410 last year German Acquisitions: One CSU and one AAC 159 DKK million Divestment of the Russian Business 33 DKK million IFRS 16 impact Organic gro
Slide 4: Revenue allocation
Revenue allocation Product split revenue 29% Calcium silicate 71% Aircrete (CSU) (AAC) Revenue share Gross profit split: CSU 30% / AAC 70% 31% Revenue share Revenue share 25% 27% Strong market positions United Kingdom (31%) Germany (25%) Poland (27%) Other markets (17%) Sales and Administration Airc
Slide 5: Acquisitions and divestments
Acquisitions and divestments Delivering on the strategy CSU factory in Dresden, Germany AAC factory in Laussnitz, Germany Divestment of Russian Business • The transaction was closed in April 2019. • The transaction was closed in January 2020. • Enterprise value of the business was DKK 96 million. •
Slide 6: Strong revenue growth
Strong revenue growth Revenue growth FY 2019 of 13% Q4 revenue development impacted by: • All areas contributed to growth • Stable development in AAC market • Organic growth of 6%, mainly driven by prices in • German high-rise market slowdown Germany, Poland and the UK • Divestment of Russia • UK in
Slide 7: Record high earnings
Record high earnings Earnings (bsi), full year DKKm 2018 2019 Q4 EBIT (bsi) up by DKK 17 million driven by: +31% 539 UK +61% 410 • UK positively impacted by product mix but partly offset by 366 stock movements last year 228 Germany • The German market was positively impacted by strong EBITDA EBIT pr
Slide 8: Strong development in Net debt
Strong development in Net debt -118 Key developments: 91 525 • Strong operational cash flow of DKK 97 117 369m 369 4 21 407 • Capital investments of DKK 126m 33 4 • Positive net cash from acquisitions and 126 divestments • Negatively impacted by IFRS 16 • Financial gearing of 0.8x at year-end • Fina
Slide 9: Financial highlights
Financial highlights Q4 Q1-Q4 DKK million 2019 2018 Variance 2019 2018 Variance Actual 625 660 (5%) 2,840 2,523 13% Revenue Organic 615 660 (7%) 2,662 2,523 6% Gross margin* 31% 28% 3% 31% 27% 4% EBITDA* 104 110 (6) 539 410 129 EBIT* 60 43 17 366 228 138 EBIT margin* 10% 7% 3% 13% 9% 4% Special item
Slide 10: Setting ESG targets
Setting ESG targets The targets • Frequency of accidents (FRA) improvement target is a rolling 50% reduction of the accident rate over a five-year period i.e. to be 3 in 2024. (from 2019 baseline of 6) • Reduce energy consumption per m3 by 7% vs. 2019 base line of 565 MJ per m3 by 2024. • Reduce wat
Slide 11: Market outlook
Market outlook General • First half of 2020, the indicators across markets are continued high building activity • Second half of 2020, general demographic undersupply remains but visibility is low UK • Flat to modest growth is expected in 2020 on a very high activity level • Positive signs after Bre
Slide 12: Next investment steps
Next investment steps Investing in existing infrastructure • New CSU factory in Reda – totalling around DKK 30 million • Investing in upgrading acquired CSU factories in Poland • Investing in upgrading existing factory in UK – converting to sand • Investing in upgrading existing AAC factory in Germa
Slide 13: Outlook 2020
Outlook 2020 • Revenue growth before acquisitions and measured in local currencies is expected to be in the range -2% to 2%. • EBIT before special items is expected to be DKK 300-360 million. • Investments excluding acquisitions, divestments and IFRS 16 effect are expected to be DKK 140-180 million
Slide 14: Long term financial targets
H+H expects to use free cash flow to develop Long term financial targets 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 15: Q&A
Q&A Investor presentation, FY 2019 15
Slide 16: 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, FY 2019 16
Slide 17: Appendices
Appendices Investor presentation, FY 2019 17
Slide 18: H+H – at a glance
H+H – at a glance 2,840 Revenue in DKK million 366 EBIT in DKK million* 29** Number of factories Revenue share 1,685 31% Revenue share FTE Revenue share 25% 27% Product split revenue 29% Calcium silicate 71% Aircrete (CSU) (AAC) Gross profit split: CSU 30% / AAC 70% Strong market positions United Ki
Slide 19: 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 20: Business model – adding value to our 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 Quality products of nature’s own material Trusted partners in wall building Innovative product solutions for high-rise and low-rise Key ra
Slide 21: 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 22: Top six risks
Top six risks Investor presentation, FY 2019 11 March 2020 22
Slide 23: Top six risks
Top six risks Investor presentation, FY 2019 11 March 2020 23
Slide 24: 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 25: 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 26: H+H supports customers from the very early planning stages
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, FY 2019 11 March 2020 26
Slide 27: The new brand claim opens for further opportunities
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, FY 2019 11 March 2020 27