H+h International A/s · OMXCOP:HH
H+h International A/s — Q3 2022 Earnings Presentation
28 slides from H+h International A/s's earnings presentation, Nov 10, 2022
Slide 1: H+H International A/S Q3 2022 Interim Financial Report
H+H International A/S Q3 2022 Interim Financial Report
Slide 2: Introduction
Introduction H+H is a Partner in Wall Building across Europe H+H is a wall-building materials provider. The core activity is the production and sale of autoclaved aerated concrete (“AAC” or “aircrete”) and calcium silicate units (“CSU” or “sand lime bricks”). The primary products are building blocks
Slide 3: Pleased to have joined H+H Group
Pleased to have joined H+H Group “I’m very excited to join H+H and to be part of the highly committed organization. I am pleased to see the benefits of the agile business model and how H+H is capable to offset the continued inflationary pressure with sales price increases and taking advantage of its
Slide 4: Q3 2022: High-inflation environment continued to drive price increases, while market demand started to soften
Q3 2022: High-inflation environment continued to drive price increases, while market demand started to soften Selected financial figures for Q3 2022 Figures in DKKm unless otherwise stated. Q3 2021 figures in brackets Organic growth Gross margin(1) EBIT margin(1) 7% 28% 12% (13%) (31%) (15%) Return
Slide 5: Central Western Europe: Strengthened factory network in a time of growing uncertainty
Central Western Europe: Strengthened factory network in a time of growing uncertainty Market conditions and trends Germany: • The country faces growing inflation rates, in large part due to rising natural gas prices driven by uncertainties related to future supply. • The number of building permits f
Slide 6: The United Kingdom: Current undersupply to demand mitigates uncertainty in the medium term
The United Kingdom: Current undersupply to demand mitigates uncertainty in the medium term Market conditions and trends • In the private housing segment, demand remains resilient, but in combination with the growing inflation, rising interest rates have led to decreases in expected starts. • While a
Slide 7: Poland: Growing inflation impacts construction starts while the country faces a growing need for additional housing space
Poland: Growing inflation impacts construction starts while the country faces a growing need for additional housing space Market conditions and trends • The number of building permits issued over the period remains at a reasonable high level, driven by changes in legislation. • However, due to growi
Slide 8: Quarterly revenue driven by the continued implementation of sales price increases to offset inflationary pressure
Quarterly revenue driven by the continued implementation of sales price increases to offset inflationary pressure Consolidated revenue by quarter Quarterly revenue by region DKKm. Bubbles show revenue growth (organic growth) DKKm. Bubbles show revenue growth (organic growth) Q3 2021 Q3 2022 +14% (-2
Slide 9: Margins under pressure in Q3 2022 driven by German factory updates and high inflation
Margins under pressure in Q3 2022 driven by German factory updates and high inflation Gross profit and gross margin EBITDA and EBITDA margin EBIT and EBIT margin DKKm and percent, respectively DKKm and percent, respectively DKKm and percent, respectively 31% 28% 21% 17% 15% 12% 250 254 167 151 121 1
Slide 10: Strong start contributes to solid organic growth across all regions for Q1-Q3 2022
Strong start contributes to solid organic growth across all regions for Q1-Q3 2022 Consolidated Q1-Q3 revenue Q1-Q3 revenue by region DKKm. Bubbles show revenue growth (organic growth) DKKm. Bubbles show revenue growth (organic growth) Q3 Q1-Q3 2021 Q2 Q1-Q3 2022 +18% (+4%) +22% (+16%) Q1 2,794 1,24
Slide 11: Continued gross margin defence and leverage of SG&A drives EBITDA and EBIT margins in Q1-Q3 2022
Continued gross margin defence and leverage of SG&A drives EBITDA and EBIT margins in Q1-Q3 2022 Gross profit and gross margin EBITDA and EBITDA margin EBIT and EBIT margin DKKm and percent, respectively DKKm and percent, respectively DKKm and percent, respectively 30% 29% 20% 20% 14% 14% 818 689 59
Slide 12: Earnings decreased interest-bearing debt partly offset by capital expenditures and the purchase of treasury shares
Earnings decreased interest-bearing debt partly offset by capital expenditures and the purchase of treasury shares. Financial gearing remains below H+H´s long-term target Net interest-bearing debt (“NIBD”) Financial gearing DKKm Net interest-bearing debt to EBITDA before special items 368 350 14 2.0
Slide 13: Status on DKK 150 million share buy-back programme
Status on DKK 150 million share buy-back programme • As of 30 September 2022, a total of 770,300 shares, corresponding to 4.4% of the total share capital in H+H, had been bought back under the programme for a total purchase price of DKK 113 million. • Further investments in profitable growth remains
Slide 14: Financial outlook for the full year 2022 narrowed
Financial outlook for the full year 2022 narrowed Organic growth EBIT before special items ∼15% 440 to 470 (Previously 15% to 20%) (Previously 440 to 520) DKKm Specific assumptions: • Exchange rates, primarily the British pound ("GBP"), the euro ("EUR") and the Polish zloty ("PLN"), are expected to
Slide 15: Low visibility as macroeconomic landscape drives performance
Low visibility as macroeconomic landscape drives performance In Q3 2022 H+H experienced changes in market conditions resulting in declining markets. H+H has initiated specific resilience actions to mitigate impacts from a declining market demand. H+H’s continue its ability to negotiate sales price i
Slide 16: Questions and answers
Questions and answers
Slide 17: Supplementary information
Supplementary information
Slide 18: 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, H+H 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 19: Summary of strategic targets
Summary of strategic targets Long-term targets Mid-term targets Short-term targets EBIT margin before special H+H commits to reducing absolute Scope 1 and 2 greenhouse-gas Organic growth items emissions by 15% to 20% 13% in 2021 12% 46% EBIT before special items DKK 440m to 520m Increased from 11% b
Slide 20: Performance highlights
Performance highlights Revenue and organic growth Gross profit and gross margin before special items EBIT and EBIT margin before special items Revenue Gross profit(1) DKKm % DKKm % EBIT(1) DKKm % Organic growth Gross margin(1) 3,500 24 1,000 40 EBIT margin(1) 500 15 3,000 800 400 12 16 30 2,500 2,00
Slide 21: Five-year financial summary
Five-year financial summary Income statement (DKK million) 2021 2020 2019 2018 2017 Financial ratios 2021 2020 2019 2018 2017 Revenue 3,020 2,654 2,840 2,523 1,622 Organic growth 13% (6%) 6% 18% 3% Gross profit before special items 905 836 877 690 452 Gross margin before special items 30% 31% 31% 27
Slide 22: Business model
Business model Resources Added value People Customer value We value our workforce, recognise the By understanding our customers, their local advantages of diversity and believe in the needs and the industry trends, we help equality of people overcome challenges, eliminate waste and manage complexiti
Slide 23: Equity story
Equity story Unique market conditions Differentiated market Sustainable solutions Proven track record of for growth approach —net-zero emissions by 2050 strategy execution • Structural under-supply of housing • Value-added customer relationships and assistance • Long-lasting and recyclable products
Slide 24: Condensed consolidated income statement
Condensed consolidated income statement Income statement (DKK million) Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021 Full year 2021 Revenue 920 811 2,794 2,289 3,020 Cost of goods sold (666) (561) (1,976) (1,600) (2,115) Gross profit before special items 254 250 818 689 905 Sales costs (41) (36) (125) (108)
Slide 25: Condensed consolidated statement of comprehensive income
Condensed consolidated statement of comprehensive income Statement of comprehensive income (DKK million) Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021 Full year 2021 Profit for the period 82 88 283 230 321 Items that may be reclassified subsequently to profit or loss: Foreign exchange adjustments, foreign e
Slide 26: Condensed consolidated balance sheet
Condensed consolidated balance sheet Assets (DKK million) 30 Sep. 2022 31 Dec. 2021 30 Sep. 2021 Equity and liabilities (DKK million) 30 Sep. 2022 31 Dec. 2021 30 Sep. 2021 Non-current assets Equity Goodwill 453 364 292 Share capital 175 180 180 Other intangible assets 272 296 243 Retained earnings
Slide 27: Condensed consolidated cash flow statement
Condensed consolidated cash flow statement Cash flow statement (DKK million) Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021 Operating profit (loss) 101 121 369 310 Financial income, received 1 1 3 2 Financial items, paid (4) (7) (15) (18) Depreciation and amortisation 50 46 149 138 Gain and losses on sale of
Slide 28: For further information, please contact Niclas Bo Kristensen
For further information, please contact Niclas Bo Kristensen Head of Investor Relations and Treasury +45 24 48 03 67 nbk@HplusH.com H+H International A/S Lautrupsgade 7, 5th Floor 2100 Copenhagen Ø Denmark +45 35 27 02 00 info@hplush.com www.hplush.com Q3 2022 Interim Financial Report | Webcast 10 N