H+h International A/s · OMXCOP:HH
H+h International A/s — Investor Presentation (March 2022)
52 slides from H+h International A/s's investor presentation, March 2022
Slide 1: Investor presentation
H+H International A/S Investor presentation March 2021 a
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
Slide 6: Structural growth drivers that transcend industries
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 with increasing market penetration
Modern and carbon-friendly products with increasing market penetration ( gb Modern and long-lasting products. Aircrete was invented in the early-1930’s, decades or even centuries later than timber, concrete, clay, and bricks. H+H’s products have an expected lifetime of 100-150 years. with sustainabl
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 So . capa mpr igh effective integrat utilisation in the manufacturing organisation d s. HH fectiveness. lows a lean manufacturi g, utilising ada demand situation and synergie al synergies from duo-product selling and I contin
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: Opportunity to upgrade the Wittenborn factory
..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: Strides 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 10% to 15% 13% in 2021 EBIT befo
Slide 23: Geographical footprint
Geographical Ttootp! a
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 review
Financial revie a,
Slide 29: Full-year 2021: strongest-ever annual results
Full-year 2021: strongest-ever annual results with solid organic growth and record earnings Selected financial figures Figures in DKKm unless otherwise stated. 2020 figures in brackets Organic growth EBIT® Profit after tax (-6%) (332) (251) Capital expenditures Free cash flow Financial gearing?) (13
Slide 30: Strong fourth quarter drove organic growth of 11%
Strong fourth quarter in especially the Nordics and Poland drove organic growth of 11% Revenue growth by market Consolidated revenue DKKm. Bubbles show revenue growth / organic growth DKKm HM 042019 MM Q42020 Ml Q4 2021 14% / +11% 731 625 642 Central Western Europe United Kingdom Poland Q4 2019 Q4 2
Slide 31: Full-year organic growth of 13%
Full-year organic growth of 13% driven by strong customer demand across all regions and significantly higher sales volumes in the United Kingdom Revenue growth by market Consolidated revenue by quarter DKKm. Bubbles show revenue growth / organic growth DKKm 1,399 1,299 M2019 M2020 M2021 mo MO Moe mo
Slide 32: Resilient cost structure
Cost structure remains highly resilient with roughly 75% of costs base fully scalable to production Breakdown of cost items Percent of total costs (2021) \ | AE | H+H
Slide 33: Solid margin defence despite inflationary pressure
Solid margin defence despite inflationary pressure from increasing prices of raw materials Gross profit and gross profit margin DKKm and percent, respectively EBITDA and EBITDA margin DKKm and percent, respectively EBIT and EBIT margin DKKm and percent, respectively 31% 31% 20% ° 19% 19% 17% ° 13% 1
Slide 34: Pricing discipline and hedging offset inflation
Firm pricing discipline, strong procurement efforts and solid hedging policies helped offset negative margin impact from inflation Gross profit and gross profit margin EBITDA and EBITDA margin DKKm and percent, respectively DKKm and percent, respectively 31% EBIT and EBIT margin DKKm and percent, re
Slide 35: Strong free cash-flow generation
Strong free cash-flow generation driven by historical high earnings Free cash flow, excl. acquisitions and divestments DKKm 591 ca oor 454 EBITDA before Special items EBITDA Change Financial Taxes paid Other) — Cash flow from Capital Free cash flow, special items in NWC items, net, operations expend
Slide 36: Net interest-bearing debt increases year-on-year
Net interest-bearing debt increases year-on-year as a result of share buy-back programmes and German acquisitions Net interest-bearing debt (“NIBD”) Financial gearing DKKm Net interest-bearing debt to EBITDA before special items 350 . 2.0x Long-term financial target of 1-2x EBITDA 15x 10x 0.6x a : :
Slide 37: 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 38: Share buy-back programme
H+H to initiate share buy-back programme of up to DKK 150 million Share buy-back programme Pro-forma financial gearing post share buy-back Net interest-bearing debt to EBITDA before special items . irectors has decided to initiate a share buy-back programme of up to DKK 15 aa g to a total of 828,729
Slide 39: Financial outlook for 2022
Financial outlook for 2022 Organic growth EBIT 10% to 15% 420 to 500 (DKKm) Specific assumptions: * Exchange rates, primarily the British pound (“GBP”), the euro (“EUR”) and the Polish zloty (“PLN”) remain at mid-February 2022 levels. + Inflation rates related to the cost of energy and raw-materials
Slide 40: Increase of long-term financial targets
Underlying market conditions support increase of long-term financial targets EBIT margin before special items Return on invested capital (ROIC) 2021: 14% 2021: 20% Financial gearing 2021: 0.6x Note: The Group's longterm financial targets reflects the ambition to maintain average minimum levels throu
Slide 41: Supplementary information
Slide 42: 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 43: Break-down of energy sources used in 2021
Break-down of energy sources used in 2021 Share of total energy consumption (GJ) in 2021 Other 9% ~ | = Total Central Western Europe United Kingdom Poland
Slide 44: Board of Directors
Board of Directors Members of the Board of Directors Kent Arentoft, Chairman Stewart A. Baseley Volker Christmann Pierre-Yves Jullien Miguel Kohimann Professional board member sor al board member Chairman of DSVM Invest Executive Chairman, Home Builders Federation and Board of Di four iar and German
Slide 45: Executive Management Team
Executive Management Team -— Executive Board Michael Troensegaard Andersen Chiet Executive Oficer since 2011 Peter Klovgaard-Jorgensen Chiet Financial Officer since 201 r— Senior Executives Peter Lidstone Bjarne Pedersen Chief Operating Officer since 2016 Chief Human Resourc 2019 Chief Strategy Offi
Slide 46: 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 47: 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 48: Consolidated income statement
Consolidated income statement Income statement (DKK million) Revenue Cost of goods sold Gross profit before special items Sales costs Administrative costs Other operating income and costs. net EBITDA before special items Depreciation, amortisation and impairment losses EBIT before special items Spec
Slide 49: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income Statement of comprehensive income (DKK million) 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 subsequently to profit: Actuarial gai
Slide 50: Consolidated balance sheet
Consolidated balance sheet Assets (DKK million) 30 Dec. 2021 31 Dec. 2020 Equity and liabilities (DKK million) 30 Dec. 2021 31 Dec. 2020 Goodwill ail Share capital 180 Customer relations 244 Translation reserve (147) Other intangible assets 14 Retained earnings 1,405 Intangible assets 469 Equity att
Slide 51: Consolidated cash flow statement
Consolidated cash flow statement Cash flow statement (DKK million) 2021 2020 Operating profit (loss) 332 Change in borrowings Financial income, received 3 Debt from acquired enterprises Financial items, paid (23) Change in lease liabilities Depreciation and amortisation 189 Dividend to non-controlli
Slide 52: For further information, please contact
For further information, please contact Andreas Holkjzer 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
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