H+h International A/s · OMXCOP:HH
H+h International A/s — Investor Presentation (May 2022)
48 slides from H+h International A/s's investor presentation, May 2022
Slide 1: Investor presentation
H+H International A/S Investor presentation May 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 Astrong solution in sustainable building allows for various applications. As a result, the customer segments are also diverse and provide a differentiated risk profile. Q
Slide 9: Revenue by product line and region
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 ae 2017 2021 2017 2021 I Calcium silicate("CSU") Il 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 2010 2021 2010 2021 2010 2021 Hl H+H product offer
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 icrevenue (DKKm) 2.500 SEAGR= HB : : : - i 500 2014 201 2016 2017 2018 2019 2020 202: (1) Revenue in 2 10-19 pandemic and the three-month
Slide 15: Growth through profitable acquisitions since 2014
Since 2014, H+H has grown 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 factories in H+H port
Slide 16: 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 17: Acquisitions completed in 2021 expand German factory network
Acquisitions completed in 2021 provide important expansion of German factory network... Feuchtwangen acquisition * Acquisition of one AAC factory located in Feuchtwangen in Bavaria, Germany + The acquisition provides true national coverage for H+H's aircrete business + Through the acquisition, H+H w
Slide 18: Wittenborn factory upgrade supported by expanded network
..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 19: Meeting strong demand while consolidating our platform
Meeting the strong demand while consolidating our platform Current product portfolio Aircrete Calcium silicate Other wall-building materials Central Western Europe Explore acquisitive growth opportunities within new product segments through acquisitions The United and/or continued focus on Kingdom i
Slide 20: Journey 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 21: Roadmap to carbon reductions in line with Paris Agreement
Roadmap to achieve carbon reductions in line with the Paris Agreement 100% 54% Scope 2019 ba: Organic growth and improvements. net (2019-2030) l Organic growth and improvements, net /e expect to grow our business organically. The related increase in emissions will partly be offset by continuous impr
Slide 22: 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 23: Geographical footprint
? Geog aphical. | footprint
Slide 24: 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 25: 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 26: 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 27: 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 28: Financial position
Slide 29: Q1 2022: record start to the year drives guidance upgrade
Q1 2022: record start to the year in challenging market drives guidance upgrade Selected financial figures Figures in DKKm unless otherwise stated. 2020 figures in brackets Organic growth Gross margin EBIT margin 29% 28% 13% (9%) (29%) (10%) Return on Invested Capital Free cash flow Financial gearin
Slide 30: First-quarter revenue showed solid growth rates
First-quarter revenue showed solid growth rates as higher sales prices are implemented to counter growing inflation Consolidated revenue by quarter Quarterly revenue by region DKKm DKKm. Bubbles show revenue growth (organic growth) $36% (+22%) mi Q12021 MH 012022 +36% (+29% $55% (+58% 22% (+17%) 239
Slide 31: Cost structure remains highly resilient
Cost structure remains highly resilient with majority of costs base fully scalable to production Breakdown of cost items Percent of total costs (Q1 2022) H+H
Slide 32: Gross margin, EBITDA and EBIT margins
While inflationary pressure adversely impacted Q1 gross margin, EBITDA and EBIT margins remained strong 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 29% ° 28% ° 17% " °
Slide 33: Seasonal NWC developments main driver of negative free cash flow
Seasonal NWC developments main driver of negative free cash flow Free cash flow development DKKm “21 EBITDA Change in NWC. Financial Taxes paid Other Cash flow from Capital Free cash flow, items, net operations expenditures excl. M&A and divestments (1) Other’ comprises change in provisions and pens
Slide 34: Net interest-bearing debt and financial gearing
Net interest-bearing debt increased in Q1 2022 but financial gearing remained comfortably below long-term target Net interest-bearing debt (“NIBD”) Financial gearing DKKm Net interest-bearing debt to EBITDA before special items 452 2.0x Long-term financial target of 1-2x EBITDA 15x 1.0x 0.7K 06x 0.5
Slide 35: 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 36: Status on DKK million share buy-back programme
Status on DKK 150 million share buy- back programme * As of 31 March 2022, a total of 91,500 shares, corresponding to 0.5% of the total share capital in H+H, had been bought back under the programme for a total purchase price of DKK 17 million + Further investments in profitable growth remains the k
Slide 37: Upgraded financial outlook for the full year 2022
Upgraded financial outlook for the full year 2022 Organic growth EBIT before special items 15% to 20% 440 to 520 (Previously 10% to 15%) (Previously 420 to 500) DKKm Specific assumptions: + Exchange rates, primarily the GBP, the EUR and the PLN, to remain at end-April 2022 levels + Energy costs are
Slide 38: Supplementary information
Slide 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 operatingincome and costs, net EBITDA before special items Depreciation, amortisation and impairment losses EBIT before special i
Slide 45: Condensed consolidated statement of comprehensive income
Condensed consolidated statement of comprehensive income Statement of comprehensive income (DKK million) Qu2021 Full year 2021 Profit for the period Items that may be reclassified subsequently to profit or loss: Foreign exchange adjustments, foreign entities Items that will not be reclassified subse
Slide 46: Condensed consolidated balance sheet
Condensed consolidated balance sheet Assets (DKK million) 31Dec. 2021 31 Mar. 2021 Equity and liabilities (DKK million) 31 Dec. 2021 __ 31 Mar. 2021 Non-current assets Equity Goodwill 364 au Share capital 180 180 Other intangible assets 296 252 Retained earnings 1,662 1,455 Property, plant and equip
Slide 47: Condensed consolidated cash flow statement
Condensed consolidated cash flow statement Cash flow statement (DKK million) Qi20a1 Operating profit (loss) 64 Financial income, received 1 Financial items, paid ©) Depreciation and amortisation 45 Gain and losses on sale of assets and other non-cash effects : Change in working capital (92) Change i
Slide 48: For further information, please contact
For further information, please contact Andreas Holkjaer Head of Investor Relations and Treasury +45 24 48 03 67 aho@HplusH.com H+H International A/S. Lautrupsgade 7, 5th Floor 2100 Copenhagen & Denmark +45 35 270200 info@hplush.com www.hplush.com,