Interim financial report Q1 2025

Company announcement No. 583, 2025

20 May 2025

"We started the year in line with expectations, with encouraging momentum in the UK housing market. To meet growing long-term demand, we are rebuilding capacity in the UK and expect to see the full margin benefits in the second half of 2025. In Poland, the underlying fundamentals remain strong, despite a tough volume comparison with last year's strong Q1. In Germany, market challenges persist, and we haven't seen the full potential of our business yet. However, we are closely monitoring how the new German government will improve regulations and provide funding to reactivate the new-build market.

Based on our Q1 performance, we remain on track to deliver our full-year guidance" says CEO Jörg Brinkmann.

• Revenue growth measured in local currencies ("organic growth") was 3% (negative 4%).

• Sales volume decreased by 2% driven by Poland and Germany partly offset by the UK market.

• Gross profit before special items was DKK 146 million (DKK 109 million), corresponding to a gross margin of 22% (17%). The increase is driven by higher sales prices and normalised input costs.

• EBIT before special items was DKK 16 million (negative DKK 21 million), corresponding to an EBIT margin before special items of 2% (negative 3%).

• Financial gearing was 2.7 times EBITDA before special items at the end of Q1 2025 (5.1 times EBITDA before special items at the end of Q1 2024).

  FINANCIAL OUTLOOK FOR 2025 (UNCHANGED)

• Organic revenue growth for 2025 is expected to be in the range between 5% to 10%.

• EBIT before special items is expected to be in the range of DKK 120 to 180 million.

In connection with the release of the Q1 2025 Interim Financial Report, a conference call for investors and analysts is scheduled for Wednesday 21 May 2025, at 10:00 a.m. CEST. The presentation will be followed by a Q&A session. Participants can follow the conference call via live webcast here.

Financial ratios have been calculated in accordance with recommendations from the Danish Society of Financial Analysts.

*Invested capital are the average invested capital for the last twelve months. In prior periods goodwill was excluded but are now included. The comparative figures have been adjusted to reflect this as well. ROIC is calculated based on EBIT before special items divided by invested capital.

The Interim Financial Report contains forward-looking statements. Such statements are subject to risks and uncertainties, as various factors, many of which are beyond the control of H+H, may cause actual developments and results to differ materially from the expectations expressed in this document.

In no event shall H+H be liable for any direct, indirect, or consequential damages or any other damages whatsoever resulting from loss of use, data, or profits, whether in an action of contract, negligence, or other action arising out of or in connection with the use of information in this document.

Volumes and prices

Organic growth in the first quarter was 3%. This was mainly driven by higher prices as sales volumes fell by 2% in the quarter compared to the same period last year.

The UK market maintained its positive momentum and saw a strong volume development. In contrast, sales volumes in Poland declined against a strong Q1 last year. The German market continues to contract, with no signs of recovery expected in the short-term.

Price developments were in line with expectations, with overall prices higher than last year as we continue to pass on input cost increases. In the UK, price increases were implemented at the start of the year following annual negotiations. Similarly, Germany and Poland also saw positive price adjustments early in the year compared to previous quarter.

Regional market development UK

In the UK, building registrations have continued in a positive direction since mid-2024 though growth has been from a low starting point.

Mortgage approvals have also seen a positive development reaching pre-pandemic levels.

In the Spring Budget, Chancellor Rachel Reeves unveiled planning reforms to support housing.

Measures such as mandatory housing targets and development of grey belt land are set to move the government closer to its target of 1.5 million new homes over this Parliament.

Poland

Despite high financing costs, Poland's underlying housing fundamentals remain solid. Mortgage demand has declined since the conclusion of the "2% Safe Credit" scheme, though it remains above pre-scheme levels. This slowdown has contributed to a reduction in building permit approvals. The government has introduced a new support package focused on the secondary market. While its direct impact is expected to be limited, we welcome the greater clarity which could help shift both developers and buyers out of a wait-and-see mode.

Germany

Germany's housing sector remains under pressure. Despite a growing demand for affordable housing, too few homes are being built, and consumer confidence remains low.

In April 2025, the government implemented a major fiscal shift, reforming the constitutional debt brake to allow significant public spending over the next decade, including €500 billion for infrastructure as well as increased defence investments. It is still too early to assess the potential impact of these changes on construction activity.

Ramp up of UK production network

The re-opening of our second Pollington plant is progressing and will provide valuable additional capacity to better support our partners in the UK market once fully back to normal operations.

While the ramp-up phase is ongoing, we expect to see the full impact on gross margins during the second half of 2025.

Revenue

Total revenue amounted to DKK 675 million for Q1 2025 which is an increase of DKK 31 million compared to Q1 2024 (DKK 644 million).

Revenue growth measured in local currencies ("organic growth") was positive 3% in Q1 2025 compared to negative 4% in Q1 2024.

Revenue, external

Q1

Amounts in DKK million 2025 2024

Revenue

Revenue in the CWE region increased by 3% to DKK 253 million compared to DKK 245 million in Q1 2024. Organic growth in the region was 3% in Q1 2025.

Sales in the UK were strong in Q1 2025 and resulted in a revenue increase of 14% to DKK 210 million compared to DKK 184 million in Q1 2024. Organic growth of 11% in Q1 2025 was driven by higher volumes and higher prices vs. same period last year.

Revenue in Poland decreased slightly by 1% to DKK 212 million compared to DKK 215 million in Q1 2024. Organic growth was negative 4% driven by lower volumes partly offset by higher prices.

Gross profit before special items Gross profit amounted to DKK 146 million compared to DKK 109 million in Q1 2024,

corresponding to gross margins of 22% and 17%, respectively. The gross margin in the quarter was impacted by normal seasonality and the ramp-up of the Pollington 1 factory in the UK.

EBITDA before special items

EBITDA before special items amounted to DKK 64 million compared to DKK 26 million in Q1 2024, corresponding to EBITDA before special items margins of 9% and 4%, respectively.

Depreciation and amortisation

Depreciation and amortisation in Q1 2025 amounted to DKK 48 million compared to DKK 47 million in Q1 2024.

EBIT before special items

EBIT before special items amounted to DKK 16 million in Q1 2025, compared to negative DKK 21 million in Q1 2024, corresponding to EBIT margins before special items of 2% and negative 3%, respectively.

Special items

No special items recognised in the first quarter. The special items recognised in Q1 2024 mainly relate to unwinding the UK gas contract.

Net financials

Net financials amounted to an expense of DKK 16 million in Q1 2025, compared to an expense of DKK 17 million in Q1 2024.

Result before tax

Result before tax amounted to DKK 0 million in Q1 2025, compared to negative DKK 167 million in Q1 2024.

Tax

Tax for Q1 2025 amounted to a net expense of DKK 12 million compared to a net income of DKK 37 million in Q1 2024.

Result for the period

Result for the period amounted to a loss of DKK 12 million and is attributable to H+H International A/S' shareholders by negative DKK 12 million and to non-controlling interests by DKK 0 million compared to a loss of DKK 130 million in Q1 2024, allocated with a loss of DKK 129 million and a loss of DKK 1 million, respectively.

Comprehensive income

Other comprehensive income for Q1 2025 amounted to DKK 21 million compared to DKK 11 million in Q1 2024. The year-on-year development was mainly driven by a positive development in in foreign exchange adjustments.

Operating activities

Cash flow from operating activities before financial items and tax amounted to negative DKK 43 million in Q1 2025 compared to negative DKK 42 million in Q1 2024.

The improvement in earnings in Q1 2025 compared to Q1 2024 was offset by a negative development in working capital mainly affected by normal seasonality and planned payments of provisions.

Investing activities

Cash flow from investing activities in Q1 2025 amounted to a cash out-flow of DKK 12 million compared to a cash out-flow DKK 26 million in Q1 2024.

Financing activities

Cash flow from financing activities was DKK 31 million in Q1 2025 compared to DKK 122 million in Q1 2024.

On 31 March 2025, the balance sheet total amounted to DKK 3,578 million compared to DKK 3,477 million on 31 March 2024 mainly driven by an increase in current assets.

Net interest-bearing debt

On 31 March 2025, net interest-bearing debt, totalled DKK 765 million corresponding to an increase of DKK 83 million since the beginning of the year. The increase is primarily driven by a negative working capital development, and planned payments of provisions.

Equity

The consolidated equity increased by DKK 10 million compared to 31 December 2024 and increased by DKK 100 million compared to 31 March 2024.

Equity

Q1 Q1

Amounts in DKK million 2025 2024

No events have occurred after the balance sheet date that will have a material effect on the H+H Groups financial position.

• Revenue growth measured in local currencies is expected to be around 5% to 10%.

• EBIT before special items is expected to be in the range of DKK 120 million to DKK 180 million.

  ASSUMPTIONS FOR THE FINANCIAL OUTLOOK

  Key assumptions

  • Modest volume growth primarily in the UK. The outlook does not assume a market recovery in Germany.

  • Price increases aligned with cost inflation.

  • The 2025 average FX rates are based on January to April's 2025 actual average and the forward FX rates for the next 8 months.

    Other assumptions

  • Capex of around DKK 200 million.

  • Continuation of an uncertain macroeconomic and geopolitical environment.

  • Price discipline within our key markets.

The Executive Board and the Board of Directors have today discussed and approved the interim financial report for H+H International A/S for the first quarter of 2025.

The interim financial report, which has not been audited or reviewed by H+H's auditors, has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU and the Danish disclosure requirements for the interim financial reports of listed companies.

It is our opinion that the interim financial report gives a true and fair view of H+H's assets, liabilities, and financial position on 31 March 2025 and of the results of H+H's operations and its cash flows for the period 1 January to 31 March 2025.

Furthermore, it is our opinion that management's review provides a fair account of developments in H+H's operations and financial conditions, the results for the period and H+H's overall financial position, as well as a description of the most significant risks and uncertainties that H+H faces.

Copenhagen, 20 May 2025

CONDENSED INCOME STATEMENT

Group

Q1 Q1 Full-year

Amounts in DKK million 2025 2024 2024

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Group

Q1 Q1 Full-year

Amounts in DKK million 2025 2024 2024

CONDENSED BALANCE SHEET

Group

ASSETS

Non-current assets

Goodwill

Other intangible assets Property, plant and equipment Deferred tax assets

Financial assets

Total non-current assets

423 422 422

216 220 232

1,709 1,716 1,792

60 54 47

2 2 2

2,410 2,414 2,495

Current assets Inventories Receivables Cash

Total current assets TOTAL ASSETS

460 435 565

288 162 243

420 462 174

1,168 1,059 982

3,578 3,473 3,477

EQUITY AND LIABILITIES

Equity

Share capital Retained earnings Other reserves

Equity attributable to H+H International A/S' shareholders

Equity attributable to non-controlling interests

Total equity

165 165 165

1,471 1,483 1,413

(60) (82) (103)

1,576 1,566 1,475

84 84 85

1,660 1,650 1,560

Non-current liabilities Pension obligations Provisions

Deferred tax liability Credit institutions

Deferred payments, acquisition of subsidiary Lease liabilities

Total non-current liabilities

17 21 31

32 43 69

37 36 34

1,084 1,046 1,039

93 93 99

81 73 117

1,344 1,312 1,389

Current liabilities Lease liabilities Trade payables Income tax

Deferred payment, acquisition of subsidiary Provisions

Other payables

Total current liabilities Total liabilities

TOTAL EQUITY AND LIABILITIES

20 25 24

291 272 253

10 1 -

6 6 7

22 26 79

225 181 165

574 511 528

1,918 1,823 1,917

3,578 3,473 3,477

Net interest-bearing debt 765 682 1,006

CONDENSED CASH FLOW STATEMENT

Q1 Q1

Amounts in DKK million 2025 2024

H+H

Non controlling

Share

Hedging

Translation

Retained shareholders

interests'

Amounts in DKK million

capital

reserve

reserve

earnings

share

share Total

NOTES

1. Accounting policies

   The interim financial report for the period 1 January to 31 March 2025 has been prepared in accordance with the IAS 34 "Interim Financial Reporting" as adopted by the EU and additional Danish disclosure requirements for the interim financial reports of listed companies. The application of IAS 34 means that the disclosures are more limited than in a complete annual report, but that the interim financial report complies with the recognition and measurement principles in the International Financial Reporting Standards (IFRS). The interim financial report has not been reviewed by H+H's auditors.

   The accounting policies are consistent with those applied in the 2024 Annual Report, which includes a full description of the accounting policies applied.

2. Adoption of new and revised IFRSs

   H+H International A/S has adopted all new or revised and amended International Financial Reporting Standards (IFRSs) and interpretations (IFRIC) issued by IASB and endorsed by the EU effective for the financial year 2025. It is assessed that the revisions and amendments have not had a material impact on the consolidated financial statements.

3. Risk Management

   H+H's principal risks and the external factors that may affect H+H are provided in the 2024 Annual Report. These are unchanged as of 31 March 2025.

4. Significant accounting estimates and judgements

   Determining the carrying amounts of some assets and liabilities requires Management to make judgements, estimates and assumptions concerning future events. The estimates and assumptions made are based on historical experience and other factors that are believed by Management to be sound under the circumstances but that, by their nature, are uncertain and unpredictable. Financial statement items in which more significant accounting estimates and judgements are applied are listed in Note 2 of the 2024 Annual report for H+H International A/S.

   The estimates and assumptions may be incomplete or inaccurate, and unforeseen events or circumstances may occur. Moreover, the H+H Group is subject to risks and uncertainties that may lead to the actual outcomes vary from these estimates and assumptions. It may be necessary to change estimates and assumptions made previously as a result of changes in the factors on which these were based or as a result of new knowledge or subsequent events.

5. Seasonal fluctuations

   The sales pattern for H+H's products is seasonal. Sales in the second and third quarters are traditionally higher than during the rest of the year. As a part of H+H's cost base is not directly variable with revenue, deviations from projected sales may result in considerable fluctuations in the Company's earnings.

6. Income statement classified by function INCOME STATEMENT CLASSIFIED BY FUNCTION

   Amounts in DKK million Q1 2025 Q1 2024

   Revenue Cost of goods sold	675 (560)	644 (565)
   Gross profit including depreciation and amortisation	115	79
   Sales cost Administrative costs Other operating income and costs	(43) (54) (2)	(46) (52) (2)
   EBIT before special items	16	(21)
   Special items, net	-	(129)
   EBIT	16	(150)
   Depreciation and amortisation comprise:
   Depreciation of property, plant and equipment	25	26
   Amortisation of intangible assets	23	21
   Total	48	47
   Depreciation, amortisation and impairment are allocated to:
   Production costs	31	30
   Sales costs	11	11
   Administration costs	6	6
   Total	48	47

   The above table shows an extract of the income statement adapted to show depreciation and amortisation classified by function.

7. Geographical information

   Amounts in DKK million Q1 2025 Q1 2024

   Revenue

   Central Western Europe United Kingdom Poland	253 210 212	245 184 215
   	675	644

   When presenting information on geographical areas, information on revenue is based on countries with the exception of the "Central Western Europe" region which comprises Germany, Switzerland, Denmark, Sweden, the Czech Republic, Netherlands and Belgium. Revenue for Germany for Q1 2025 amounted to DKK 137 million compared to DKK 149 million in Q1 2024.

8. Special items, net

   No special items were recognised in Q1 2025. Special items in Q1 2024 relates mainly to the day one loss from settling gas contracts, reflecting the loss at the time of falling outside the own-use exemption amounting to DKK 93 million.

9. Pension obligations

   H+H has defined-benefit pension plans in the UK, Switzerland, and Germany. The UK and Swiss pension plans are managed by a pension fund to which payments are made, whereas the German pension plan is funded from current earnings. H+H's pension obligations predominantly relate to the plans in the UK.

   For interim periods, H+H's defined-benefit pension obligations are based on valuations from external actuaries carried out at the end of prior financial year considering any subsequent movements in the obligation due to pension costs, contributions etc. up until the reporting date. Actuarial calculations are updated or extrapolated quarterly.

   The net pension obligation on 31 March 2025 amounts to DKK 17 million, compared to DKK 21 million on 31 December 2024. The decrease is driven by payments, interest, value adjustment and currency adjustment.

10. Financial resources and cash flow

    On 31 March 2025, net interest-bearing debt, totalled DKK 765 million corresponding to an increase of DKK 83 million since the beginning of the year. The increase is primarily driven by a negative working capital development.

    H+H's financing is subject to usual financial covenants, which have been fulfilled in the first quarter of 2025 and are also expected to be fulfilled for the full year 2025.

11. Share-based payment

    The performance-share-units schemes for 2023 and 2024 are active and presented in the 2024 Annual Report.

    In April 2025, the Board of Directors of H+H International A/S implemented a new long-term incentive programme ("LTIP") being a performance share unit ("PSU") program. At initiation, a total of approximately 114,600 PSUs were granted to the participants, including 30,400 PSUs to CEO Jörg Brinkmann and 12,350 PSUs to CFO Bjarne Pedersen. Based on the average share price for H+H shares trading on the Nasdaq Copenhagen stock exchange during the first ten business days after the release of the 2024 Annual Report on 4 March 2025, the theoretical value per PSU is DKK 111.32, corresponding to a total theoretical value of DKK 12.8 million if all 114,600 PSU's were to vest. The vesting period for the PSUs is approximately three years, with vesting being in 2028 when the audited annual report for 2027 is published.

12. Tax
    
    
    
13. Related parties

    Related parties of H+H with significant influence include the Board of Directors and the Executive Board of the Company and their close family members. Related parties also include companies in which the aforementioned persons have control or significant interests.

    Transactions with related parties

    H+H did not enter into any significant transactions with members of the Board of Directors or with members of the Executive Board, except for compensation and benefits received as a result of their membership of either the Board of Directors, employment with H+H or shareholdings in H+H.

14. Share capital

    There have been no movements in the share capital in the last five years except for the changes stated in Note 19 "Share capital and treasury shares" of the 2024 Annual Report.

15. Events after the balance sheet date

No events have occurred after the balance sheet date that will have a material effect on H+H Groups financial position.