H+h International A/s · OMXCOP:HH
H+h International A/s — Q3 2020 Earnings Presentation
28 slides from H+h International A/s's earnings presentation, Nov 13, 2020
Slide 1: Investor presentation Q3 2020
Investor presentation Q3 2020 13 November 2020 Investor presentation, Q3 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: Keeping margins levels in challenging market
Keeping margins levels in challenging market Q3 key highlights Financial outlook for 2020 updated • After lockdown, the UK market has rebounded • Due to a quicker than expected recovery of the • Good performance in other markets despite UK market, H+H upgraded its financial outlook Covid-19 for 2020
Slide 4: The market situation
The market situation The UK market The German market The Polish Market • After three months closure of the • Lockdowns have not impacted • Lockdowns have not impacted construction industry most building building sites or distribution centres building sites or distribution centres construction sites
Slide 5: Key figures
Key figures Q3 Figures Q1-Q3 figures EBIT(bsi) EBIT margin (bsi) 13% 14% Revenue Revenue 712 116 DKK million 2,012 DKK million last year 137 DKK million 779 last year EBIT(bsi) ROIC 258 18% 19% last year Free cash flow DKK million last year Organic growth of (7)% 136 DKK million Capital expenditure
Slide 6: Underlying growth despite Covid-19
Underlying growth despite Covid-19 Total revenue, DKKm -9% Organic growth of negative 7% 779 704 712 • Organic growth down 7% predominately due to expected market 625 596 slowdown in Poland, affecting both AAC and CSU and a UK market in recovery • Positive effects from Germany the others markets Goo
Slide 7: 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 0% Q3 gross margin of 34%, Q3 2019 level kept 34% 34% 32% • Lower volumes and higher input costs, offset by lower 30% 28% transport costs, efficiency improvements as well as overall price increases Gross
Slide 8: Cost structure resilient to volume drop
Cost structure resilient to volume drop Gross profit level kept above 30% during the pandemic 2019 Production cost Distribution • Raw material consist of approx. two thirds of the direct production costs. 17% • Fixed cost base relates to fixed share of energy, salaries and production overheads, such
Slide 9: Defending margin levels despite market challenges
Defending margin levels despite market challenges EBIT margin (bsi), percentage -2%-points Q3 2020 EBIT (bsi) impacted by recovery in the UK 18% 15% 16% • Negatively affected by volume drop and increased 10% 12% 10% input cost, partly offset by higher prices 8% • Q3 2019 impacted by a strong quarter
Slide 10: NIBD and financial gearing at low levels
NIBD and financial gearing at low levels -134 407 NIBD development 14 273 • Q1-Q3 2020 CAPEX related to maintenance and 7 74 upgrade projects. Kept at a low level 305 11 65 • Paid for acquired German AAC factory in January and last preferred payment for Grupa Silicaty in Poland NIBD CF CAPEX IFRS 16
Slide 11: Financial overview
Financial overview Q3 Q1-Q3 DKK million 2020 2019 Variance 2020 2019 Variance Actual 712 779 (9%) 2.012 2.215 (9%) Revenue Organic 725 779 (7%) 2.010 2.215 (9%) Gross margin* 34% 34% 0% 32% 31% 1% EBITDA* 162 182 (20) 396 435 (39) EBIT* 116 137 (21) 258 306 (48) EBIT margin* 16% 18% (1%) 13% 14% (1%
Slide 12: 2020 market outlook
2020 market outlook Q4 2020 market outlook UK drivers for 2020 • Although volumes have returned in the UK market during • Help to Buy: Completion requirement extended to Q3, the volumes for Q4 2020 remains uncertain end of February 2021 • Stamp duty holiday – Threshold raised from • The group forese
Slide 13: Financial outlook updated
Financial outlook updated Upgrade due to higher than expected demand in the UK market for the remaining part of 2020 H+H Group Initial financial Financial Financial Realised in Updated outlook 2020 outlook 2020 outlook 2020 YTD 2020 financial 24 March 2020 reintroduced outlook 2020 Org. growth -2 to
Slide 14: Q&A
Q&A Investor presentation, Q3 2020 13 November 2020 14
Slide 15: 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, Q3 2020 13 November 2020 15
Slide 16: Appendices
Appendices Investor presentation, Q3 2020 13 November 2020 16
Slide 17: Revenue allocation Q3 2020
Revenue allocation Q3 2020 Product split revenue 31% Calcium silicate 69% Aircrete (CSU) (AAC) Gross profit split: CSU 30% / AAC 03% Revenue share 30% Revenue share 24% Revenue share 33% Strong market positions United Kingdom (30%) Germany (33%) Poland (24%) Other markets (13%) Sales and Administrat
Slide 18: 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 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 – 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 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, Q3 2020 13 November 2020 22
Slide 23: Top six risks
Top six risks Investor presentation, Q3 2020 13 November 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: 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 27: 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, Q3 2020 13 November 2020 27
Slide 28: The new brand claim opens opportunities to expand the product portfolio
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, Q3 2020 13 November 2020 28