H+H Annual Report 2019

11 March 2020
Announcement no. 385
                                                                                                                                                                             

H+H Annual Report 2019

“I’m very pleased with the strong performance for 2019, where H+H reached the highest EBITDA level in the history of the Company. The EBITDA of DKK 539 million was an increase of 31% compared to last year.”, says CEO Michael T. Andersen. “A combination of increased pricing power following the acquired businesses in Germany and Poland, favourable conditions for input costs driven by scale and general good market demand have supported the strong result for 2019”.

• The financial performance in 2019 was very satisfactory. Revenue grew 13% as demand, pricing and production output were generally strong across all markets. Organic revenue growth came in at 6% in line with recent guidance. Combined with operational excellence initiatives, this led to an increased EBITDA before special items of DKK 539 million and an EBIT before special items of DKK 366 million, both in line with recent guidance.
   
• Fourth quarter 2019 compared to last year was impacted by higher prices offset by lower volumes, mainly due to destocking following the Borough Green factory upgrade in the UK in 2018 and lower volumes in Germany and Poland in 2019. EBIT before special items increased DKK 17 million compared to last year primarily due to impairment of fixed assets related to Russia in the fourth quarter 2018 of DKK 20 million.   
   
• 2019 key focus was on the integration activities in Germany, but H+H also made two bolt-on acquisitions in Germany, where the last acquisition closed 14 January 2020. The acquisitions amounted to DKK 120 million (EV). Also, in October 2019 the Group divested the Russian business for a price of DKK 96 million (EV), in line with the strategic focus on the European core markets. In connection with the sale, a one-off non-cash FX reserve of DKK 121 million was recognised in the P&L as a financial expense, with no impact on equity. 
   
• For 2020, continued high activity levels are expected in H+H’s markets, but general visibility for second half of 2020 is low. Increased competition in Poland and capacity constraints in Germany (AAC) and the UK is expected, and earnings are expected to be negatively affected by carry over of input costs.

Selected financial highlights for 2019

DKK million	2019	2018	Q4 2019	Q4 2018
Revenue	2,840	2,523	625	660
Organic growth	6%	18%	(7%)	30%
Gross margin before special items	31%	27%	31%	28%
EBITDA before special items	539	410	104	110
EBIT before special items	366	228	60	43
EBITDA margin before special items	19%	16%	17%	17%
EBIT margin before special items	13%	9%	10%	7%
Return on invested capital	20%	10%	20%	10%
NIBD/EBITDA ratio before special items	0.8	1.3	0.8	1.3
Special items	8	65	8	26
Free cash flow	264	(603)	104	89

 Outlook for 2020

• Revenue growth before acquisitions and divestments measured in local currencies is expected to be in the range -2% to 2%.
• EBIT before special items is expected to be DKK 300-360 million.
• Investments excluding acquisitions, divestments and IFRS 16 effect, are expected to be DKK 140-180 million including investments for establishing a CSU production line near Gdansk, Poland.

Investor teleconference

H+H International A/S will host an investor teleconference on 11 March 2020 at 10.00 a.m. CET. To attend the conference call please see details below.

The conference call will be available at: https://hplush.eventcdn.net/2019fy/

Investors and analysts are invited to participate by phone: +45 78 15 01 08 (Denmark), + 44 33 33 00 92 68 (UK) and US +1 833 526 8382

Please see attached pdf for full version of the annual report for 2019.

Kent Arentoft                                       Michael T Andersen
Chairman of the Board of Directors        CEO

For further information please contact:

CEO Michael T Andersen, CFO Peter Klovgaard-Jørgensen or IR Manager Cristina Rønde Hefting on telephone +45 35 27 02 00

Disclaimer

This document 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 International A/S, may cause actual developments and results to differ materially from the expectations expressed in this document. In no event shall H+H International A/S 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.

H+H’s core activity is the manufacture and sale of wall building materials, with a revenue in 2019 of DKK 2.8 billion. The main product lines are aircrete blocks and calcium silicate units used for the residential new building segment. H+H has 29 factories in Northern and Central Europe with a total annual output of more than 4 million cubic metres of products and has a leading position in most of its markets. H+H has more than 1,600 employees and is listed on Nasdaq Copenhagen.

H+H International A/S, Lautrupsgade 7, 5th floor, 2100 Copenhagen, Denmark. Telephone +45 35 27 02 00   info@HplusH.com, www.HplusH.com
CVR no. 49619812, LEI:  3800GJODT6FV8QM841

Attachment

• Annual Report 2019