CVR no: 49 61 98 12 | Lautrupsgade 7, 5
th
floor, 2100 Copenhagen Ø
2022
Annual Report
We enable better homes for our communities
Partners in Wall Building
Being a part of H+H means you are in the
business of people and teamwork.
Our partners trust us to understand their
building needs from design, specification
and planning to delivery, assembly and
problem solving.
With our partners, we enable better homes
for our communities.
Putting people first
The health and safety of our people,
suppliers and customers, will never be
compromised. We are committed and have
the ambition of zero harm for our own and
our partners’ people.
We know that people are different. We
trust our differences enable us to see new
opportunities and be more effective.
People are the heart of H+H.
Performance driven
H+H strives to deliver results to all our
partners and in the communities where we
operate.
Even when times are difficult, we deliver
quality products with the highest level of
service to our customers. Our operations
run timely and effectively. We follow
through on our commitment to serve our
communities.
You can trust us to deliver on our promises.
Pushing the boundaries
To build better homes, we must stay
curious and eager to drive our industry
forward.
We are continuously improving operations
and products. Together with our partners
we rethink supply chains, services and
digital solutions.
We are pushing to meet the needs of
tomorrow.
Part of a sustainable future
Today we work with our partners to
reduce energy needs in homes and our
commitment is more than the long lasting
and insulating products we produce.
We are part of the solution in creating
sustainable and carbon neutral buildings.
We are partnering with our customers,
suppliers, and other stakeholders; finding
new production methods to lower the
environmental impact of homes.
We act today to realise our vision of carbon
neutrality in 2050.
Management’s review | H+H introduction
2 | H+H Annual Report 2022
Table of Contents
Management’s review Financial statements Other 2022 reports
In brief 4
Letter from the Chair 5
Letter from the CEO 7
H+H at a glance 9
Equity story 10
Performance highlights 2022 11
Five-year summary 12
Our business and strategy 13
Business model 14
Products and solutions 15
Corporate strategy and growth platform 16
Sustainability strategy 19
Sustainability highlights 20
Summary of strategic targets 22
Our performance 23
A word from the CFO 24
Full year 2022 financial review 25
Financial outlook 27
Q4 2022 key figures 28
Q4 2022 results (unaudited) 29
Financial policy and capital allocation 30
Our markets 31
Our geographical footprint 32
Central Western Europe 33
The United Kingdom 35
Poland 37
Governance and shareholder information 39
Corporate governance 40
Board of Directors 43
Executive Board 44
Risk management 45
Shareholder information 47
Financial statements 49
Income statement 50
Statement of comprehensive income 50
Balance sheet at 31 December 51
Cash flow statement 52
Statement of changes in equity 53
Notes to the consolidated
financial statements 54
Notes – Financial statements 55
Notes – Income statement 58
Notes – Balance sheet 65
Notes – Supplementary information 79
Statement by the Executive Board
and the Board of Directors 85
Independent Auditor’s Reports 86
Contact information 90
More than 100 years of experience 91
Sustainability report
www.hplush.com/sustainability-reports
Remuneration report
www.hplush.com/remuneration
Corporate Governance statement
www.hplush.com/corporate-governance-reports
7
Letter from the CEO
49
Financial statements
23
Our performance
Sustainability Report
2022
H+H International A/S
CVR-no: 49 61 98 12 | Lautrupsgade 7, 5
th
Floor. 2100 Copenhagen Ø
CVR-no: 49 61 98 12 | Lautrupsgade 7, 5
th
Floor. 2100 Copenhagen Ø
H+H International A/S
Remuneration Report
2022
Corporate Governance
Statement 2022
H+H International A/S
CVR-no: 49 61 98 12 | Lautrupsgade 7, 5
th
Floor. 2100 Copenhagen Ø
Management’s review | H+H introduction
3 | H+H Annual Report 2022
The Annual Report of H+H
International A/S comprises
consolidated financial statements
and parent company prepared
in accordance with International
Financial Reporting Standards
(IFRS) as adopted by the EU and
further requirements in the Danish
Financial Statements Act.
Forward-looking statements
The Annual 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.
Comparative figures
Unless otherwise stated, all figures in parenthesis
refer to the corresponding figures in the prior year.
IN BRIEF
Letter from the Chair
Letter from the CEO
H+H at a glance
Equity story
Performance highlights 2022
Five-year summary
4 | H+H Annual Report 2022
Management’s review
LETTER FROM THE CHAIR
Strong performance in a
challenging business environment
It is my pleasure once again to
present strong results for H+H.
The results demonstrate the
strengths of our business model
and the resilience of our diversified
footprint. Our commitment
towards sustainability,
environmental and climate
protection remains a key focus for
H+H looking ahead.
I am proud to present another successful year for H+H.
Again this year we delivered double-digit growth and
were able to pursue our strategy for profitable growth
while delivering on our financial guidance with EBIT
before special items of DKK 455 million.
Much has happened since we entered 2022, and the
macro-economic and political situation is today quite
different in many of our markets from a year ago.
The Ukraine war has led to general uncertainty, and
prices of raw materials and building materials kept
rising during parts of the year. However, thanks to the
execution of our strategy, resilient partnerships and
our dedicated employees all over Europe, we have
successfully navigated through these challenging
situations.
Onboarding a new CEO
On 1 October we welcomed our new CEO; Jörg
Brinkmann. H+H focuses on international expansion
and we believe he is the right person to drive our
agenda for profitable growth going forward as he brings
solid international experience from the industry.
Our new CEO will head the continued expansion of
our factory network, ensure innovation and keep a
firm eye on securing a continous journey towards zero
emissions.
Investing in factories and production
Our factory network plays an essential role in our future
growth. This year we have invested in optimising our
production platform in Germany and Poland, and we will
continue to do so in the coming years. Through targeted
investments we aim to harvest efficiency gains to drive
further organic growth while at the same time lowering
CO
2
emissions from our production and reducing our
overall environmental footprint.
Management’s review | H+H introduction
5 | H+H Annual Report 20225 | H+H Annual Report 2022
Together with investments, maintenance and
consolidation of our other facilities in Europe this
prepares us to meet demand in a flexible way in the
coming years. With the economic uncertainty and
instability in many parts of Europe, we have prioritised
to be resilient and scalable in these dynamic and
changing market conditions.
Towards zero emissions
Sustainability is an integral part of our strategy and
business operations and annually we allocate DKK
20 million to fund CO
2
reducing projects. Our overall
goal is to be carbon neutral in 2050, and we have set
a ten-year science-based target to decarbonise our
operations and reduce the carbon intensity of our AAC
and CSU products. It is our ambition to reduce absolute
scope 1 and 2 emissions by 46% and our scope 3
emissions per m
3
by 22% by 2030. We continue to be
on the right path to achieving these targets, which is a
recognition that our production and value chain aligns
with the 1.5°C global warming reduction required.
Long-term benefits for H+H
Our growth was particularly strong in the first half of
the year. However, the growing market uncertainty had
an impact on the second half which has slowed down
decision-making in the building sector. We are not
immune to these challenges and our revenue growth
rate is impacted by general economic uncertainty.
Though we do see macro-economic challenges in the
short- and mid-term, I am confident in the long-term
prospects for our business.
Our markets remain characterised by the longer-term
effects of a structural undersupply of housing caused
by growing populations and urbanisation. Especially
in Germany and in the UK there is a strong need for
housing, and it appears that this need will only grow in
the coming years. Also, we see increased expectations
of more sustainable, less energy-consuming and more
climate-friendly buildings.
This speaks directly to our business model. H+H is
strongly positioned to take advantage of these trends,
and we will be investing in advancing that position over
the coming years.
Our promise
At H+H we focus on delivering shareholder value. This
includes defining ambitious and realistic financial
targets, providing relevant guidance, communicating
concisely to the market, and delivering open and
transparent data about our business performance.
Although we are seeing a shift in market demand and
tougher times ahead, our markets are characterised
by a structural undersupply and a need for sustainable
housing solutions, and we are therefore confident in the
long-term prospects for our business. We maintain our
long-term financial ambitions over a cycle of an EBIT
margin of 12% and ROIC of 16%.
On behalf of the Board of Directors, I am grateful for
the support that our customers, business partners and
investors bring us. Also, I am proud that our people
overcame the considerable challenges presented during
the year due to the volatility and uncertainty on our
markets. They made us able to deliver uninterrupted
service to our customers across our footprint.
Kent Arentoft
Chair
Long-term financial targets
EBIT margin before special items
12%
13% in 2022
Financial gearing
Net interest-bearing debt to EBITDA
before special items
1-2x
0.7x in 2022
Return on invested capital (ROIC)
16%
19% in 2022
Note: The long-term financial targets reflect the ambition to
maintain average levels across a full business cycle.
Management’s review | H+H introduction
6 | H+H Annual Report 2022
LETTER FROM THE CEO
A strong and sustainable business
model delivered record results
2022 was a record year for H+H
We delivered our best result ever
with an organic growth of 14%
and an EBIT before special items
of DKK 455 million. Our business
model and lean organisation
proved resilient to the challenging
business environment. We remain
agile and adjust to the market
changes in front of us.
A lot has changed in 2022 with the beginning of the
war in Ukraine, high inflation, and higher prices for our
raw materials and energy. Consequently, we increased
our sales prices throughout the year with the clear
ambition to offset rising input costs. The team delivered
all-time high financial performance with revenue of
DKK 3.604 million and an EBIT margin of 13%. Also, our
CO
2
emissions and safety performance significantly
improved and reached new levels.
Delivering such results in a challenging market
environment is not easy and I would like to thank our
employees for their dedication and ability to adapt
to these challenges. Through 2022, our teams have
worked tirelessly to deliver unparalleled quality and
customer service, working closely together with our
partners and continuously improving our business
model. Also, I would like to extend my gratitude to our
customers and suppliers for entrusting us in meeting
their needs.
Continuously improving our operations
As a manufacturing company the performance of our
plants is critical for our business success. Consequently
we strive to improve our operations through continuous
improvement initiatives, maintenance investments and
strategic investments.
In 2022, our Wittenborn factory in Germany was
upgraded, resulting in higher efficiency and more
reliable output to serve our customers with high quality
AAC products in Northern Germany and Nordics. Also
in 2022, a new CSU plant in our existing AAC factory
in Reda, Poland was opened. It is the first factory in
Poland capable of producing both AAC and CSU, and
the factory will be supplying the growing Tri-city area
around Gdan´sk.
Management’s review | H+H introduction
7 | H+H Annual Report 2022
Management’s review | H+H introduction
In November 2022, we also announced an upgrade to
our Borough Green factory to increase the UK capacity
by approximately 10% to be completed in beginning of
2024.
In parallel to our ongoing investments, we believe
to have further potential in our factory network
through best practice sharing, standardisation and
de-bottlenecking. This leads to higher efficiency and
increased output, which is needed to meet the future
demand for our products in our markets.
In all we do, nothing is more important than the safety
of our people, and I am very pleased to report that we
reduced our Lost Time Incident Frequency (LTIF) to 3.6
in 2022, the lowest level ever achieved. However, every
accident is one to many and we restlessly strive for zero
harm.
Driving forward our ESG agenda
We strongly support the sustainable transformation
of Europe towards carbon neutral construction. We
believe in leading by example and was one of only six
companies within our sector in Europe to have science-
based targets approved in 2021.
We are a year ahead of our target having reduced our
emissions approximately 8 percent in 2022 year-on-
year, and we have established a structured process
for identification and implementation of CO
2
reducing
projects, optimizing our energy mix and collaborating
with our suppliers to reduce Scope 3 emissions.
Our ESG agenda is becoming an integral part of our
business strategy and to support this our 2023 LTI and
STI programmes will include ESG targets across our
organisation. In addition, in the beginning of March,
we entered our first sustainability-linked finance
agreement with Nordea including targets for CO
2
emissions and safety.
Short-term challenging market environment,
long-term growth opportunities
In the second half of 2022, we have seen decreases
in building permits issued in all our markets. Higher
building cost as well as rising mortgage rates have
led to increased uncertainty, and we have seen
construction activities declining from end 2022 into
start 2023. Consequently, towards the end of 2022, we
initiated a mitigation plan, which includes adjusting our
capacity to lower demand, tight cost management and
review of investment levels.
At the same time, inflation continues to impact our
production costs, and we expect to see these costs
maintained at a high level. As we remain committed to
defend our earnings, we will continue to pass through
cost inflation to the market.
Despite those challenges our long-term market view
remains positive, as urbanization and structural
undersupply of housing across Europe continues to
hold attractive growth opportunities. Our products are
well suited to support the demand for affordable and
sustainable housing.
M&A remains a strategic growth driver
Strategic growth through acquisitions has been a
strong part of our strategy in recent years. During 2022,
we have successfully integrated two acquisitions made
in 2021. Acquisitions will continue to be a growth driver
for H+H, as we see further synergies from expansion of
our factory network in existing markets and potentially
entering new markets. Our strong financial position
enables us to pursue profitable growth opportunities,
and we will continue to explore potential targets.
Jörg Brinkmann
Chief Executive Officer
“In parallel to our
ongoing investments,
we believe to have
further potential in
our factory network
through best
practice sharing,
standardisation and
de-bottlenecking”
Management’s review | H+H introduction
8 | H+H Annual Report 2022
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.
Sustainability
46%
By 2030, to reduce absolute
Scope 1 and 2 GHG emissions
by 46% from a 2019 base
year, equivalent to a 4.2%
reduction each year.
By 2050, achieve net-zero
emissions.
Employees
1,739
We have more than 1,700
employees working across
eight different countries in
Northern and Central Europe.
Approximately two-thirds
work in our factories.
Factories
32
We have 32 factories across
Northern and Central Europe
with a total annual output
of close to 4.5 million cubic
metres of wall-building
materials.
Acquisitions
24
Since 2014, we have acquired
24 factories. These have
contributed to a significant
expansion of our factory
network and have more
than tripled our white-stone
businesses in both Germany
and Poland.
Revenue by product line (FY 2022)Revenue (DKKm)
3,604
In 2022, we generated total
revenue of DKK 3,604 million
and organic growth of 14%.
AAC and CSU accounted for
71% and 29% of total revenue,
respectively.
29%
Calcium silicate (CSU)
is a heavy and dense wall-
building material primarily
used for residential high-rise
buildings. The product is fire
resistant and has a very high
degree of sound insulation.
71%
Aircrete (AAC)
combines strength and
durability with fire resistance,
low weight and excellent
thermal insulation making it the
ideal material for the residential
low-rise housing market.
Both products are key components for energy-efficient
wall systems.
Management’s review | H+H introduction
9 | H+H Annual Report 2022
Equity story
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 growth
• Structural undersupply of housing
• Government commitment and stimuli programmes
for housebuilding
• Demographic growth and changing housing needs
• Fragmented markets with room for consolidation
through acquisitions
• High entry barriers for new competitors
Differentiated market
approach
• Value-added customer relationships and assistance
through entire building process
• Supplying sophisticated and sustainable solutions
• High degree of market adaptability
• High customer retention rate
Sustainable solutions
— net-zero emissions by 2050
• Commitment to ambitious emission-reductions in
line with the 1.5-degree scenario
• Long-lasting products
• Carbon-friendly products with CO
2
absorbing abilities
• Aspiration to deliver ‘less-than-zero’ emission
products
• Insulating properties leading to energy savings and
more sustainable buildings
Proven track record of
strategy execution
• European market-leading position in AAC and CSU
products established through M&A
• Consolidation of fragmented markets continues to
provide attractive synergies
• Efficient integration process and agile organisation
• Return on Invested Capital (ROIC) consistently above
WACC
• Strong cash-flow generation to fund continued
growth
Management’s review | H+H introduction
10 | H+H Annual Report 2022
Performance highlights 2022
DKKm Ratio
0
120
240
360
480
600
2018 2019 2020 2021 2022
0,0
0,5
1,0
1,5
2,0
2,5
DKKm %
0
500
1,000
1,500
2,000
2,500
2018 2019 2020 2021 2022
0
5
10
15
20
25
DKKm
0
70
140
210
280
350
2018 2019 2020 2021 2022
DKKm %
0
200
400
600
800
1,000
2018 2019 2020 2021 2022
0
7
14
21
28
35
0
800
1,600
2,400
3,200
4,000
DKKm %
2018 2019 2020 2021 2022
-8
0
8
16
24
32
DKKm %
0
100
200
300
400
500
2018 2019 2020 2021 2022
0
3
6
9
12
15
Invested capital and ROIC excluding goodwillNet interest-bearing debt and financial gearing
1
Profit after tax
Note: In 2018, Return on invested capital (ROIC) was adversely impacted by a one-off related to
the acquisition and integration of the German and Polish businesses as well as impairment of fixed
assets in the now divested Russian business. Adjusted for these effects, ROIC would have been 17%.
1
Net interest-bearing debt to EBITDA before special items ratio
Note: Net interest-bearing debt for 2019 onwards include the impact from IFRS 16
317 0.7x 19%
Profit after tax Net interest-bearing debt
Financial gearing
Invested capital
Return on invested capital
EBIT and EBIT margin before special itemsGross profit and gross margin before special itemsRevenue
3,604
28% 13%
Selected financial figures and ratios
Revenue
Organic growth
Gross profit before special items
Gross margin before special items
EBIT before special items
EBIT margin before special items
Management’s review | H+H introduction
11 | H+H Annual Report 2022
Five-year summary
Income statement
(DKK million) 2022 2021 2020 2019 2018
Revenue 3,604 3,020 2,654 2,840 2,523
Gross profit before special items 1,020 905 836 877 690
EBITDA before special items 657 591 521 539 410
EBITDA 615 567 521 531 345
EBIT before special items 455 408 332 366 228
EBIT 413 377 332 358 163
Profit before tax 398 356 307 205 125
Profit after tax for the period 317 321 251 150 125
Balance sheet
(DKK million) 2022 2021 2020 2019 2018
Assets 3,750 3,400 2,909 2,716 2,421
Invested capital 2,142 1,852 1,865 1,809 1,568
Investments in property, plant, and equipment
1
266 197 134 126 138
Aquisition and divestment of enterprises - 238 72 (20) 839
Net working capital 242 65 55 48 8
Equity 1,938 1,814 1,509 1,371 1,000
Net interest-bearing debt (NIBD) 492 350 230 407 525
Cash flow
(DKK million) 2022 2021 2020 2019 2018
Cash flow from operating activities 316 454 425 369 370
Cash flow from investing activities (255) (427) (206) (105) (973)
Cash flow from financing activities (19) (25) 6 (131) 679
Free cash flow 61 27 219 264 (603)
Financial ratios
(DKK million) 2022 2021 2020 2019 2018
Organic growth 14% 13% (6%) 6% 18%
Gross margin before special items 28% 30% 31% 31% 27%
EBITDA margin before special items 18% 20% 20% 19% 16%
EBITDA margin 17% 19% 20% 19% 14%
EBIT margin before special items 13% 14% 13% 13% 9%
EBIT margin 11% 12% 13% 13% 6%
Return on invested capital, excluding goodwill
2
19% 20% 18% 20% 10%
Solvency ratio 49% 50% 50% 49% 41%
Financial gearing 0.7x 0.6x 0.4x 0.8x 1.3x
ESG performance data
(DKK million) 2022 2021 2020 2019 2018
Average number of FTEs 1,738 1,572 1,619 1,685 1,651
Full-time workforce 1,739 1,663 1,571 1,636 1,608
Lost-time incident frequency (LTIF) 3.6 5.5 5.7 5.6 9.0
Sickness absence (days per FTE) 13 12 13 13 10
Total energy per m
3
(MJ) 567 554 551 565 593
Fresh water consumption per m
3
(litres) 369 354 363 382 387
SBTi targets 2022 2021 2020 2019 2018
Scope 1+2 emissions (Tonnes) 176,250 191,806 178,363 199,209 N/A
Scope 3 intensity (kg/m
3)
157 157 157 162 N /A
1
Investment in property, plant, and equipment excludes effects from IFRS 16.
2
Due to the acquisitions the method for calculating Return on invested capital (ROIC) has changed to better reflect a true and fair view. ROIC for the period 2018-2021
has been calculated as Operating profit (EBIT) relative to average invested capital (excluding goodwill) on a twelve-month basis.
Note: Financial ratios and ESG measures have been calculated in accordance with recommendations from the Danish Society of Financial Analysts.
Management’s review | H+H introduction
12 | H+H Annual Report 2022
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 and sales offices with national
reach within the countries in which we
operate
Unique market conditions for growth
Structural undersupply of housing,
demographic growth, urbanisation and
changing housing needs provide a solid
growth platform
Solid capital structure
Our strong and flexible capital structure
supports our continued growth journey
and sustainable shareholder value
creation
Added value
Customer value
By understanding our customers, their
local needs and the industry trends,
we help overcome challenges, elimi-
nate waste and manage complexities
throughout the wall-building process
Modern and carbon-friendly products
Our products offer improved indoor
climate and energy savings as well as
fire resistance and better acoustic insu-
lation between rooms. In addition, the
products are long-lasting and can be
integrated into a circular economy
Safe and attractive work environment
Employment and working conditions
must be safe, fair and non-discrimina-
tory to attract top talents and support
the development and career ambitions
of our employees
Shareholder value
We will continue to pursue profitable
growth through acquisitions and
investments in the existing production
platform to generate robust, long-term
value for our shareholders. Further, we
may return excess capital to share-
holders by means of dividends and/or
share buy-back programmes
We enable better homes for our
communities
Strategy execution
We have a strong track record
of strategy execution. Through
consolidation of the European
white-stone markets, we have
realised significant synergies
related to both pricing, sourcing
and sales channels
Quality manufacturing
We follow a lean manufacturing
process to improve efficiency and
eliminate waste. Further, targeted
capital investments improve
reliability, throughput and quality
across the production platform
Value-added sales
We support our customers from
the early planning stage and
throughout the wall-building
process. We aim to be the ideal
partner and a one-stop shop for
every wall-building project
Diversified market
Our product range is diverse
and its flexibility allows for
various applications. As a
result, the customer segments
are also diverse and provide a
differentiated risk profile
Our business
Management’s review | Our business
14 | H+H Annual Report 2022
Private low-rise houses
H+H has a strong track record and
expertise in construction of walls for
private low-rise houses.
Applicable across segments and purposes
Volume housebuilders
H+H is a trusted partner to builders of
large construction projects ensuring cost-
efficient and high-quality solutions.
Public sector housing
H+H is committed to supporting public
sector housing providers with high quality,
long-lasting and energy-efficient housing.
Commercial and industry
H+H’s solutions are immensely
versatile and can be used in many
types of commercial and industrial
buildings – low-rise as well as high-rise.
Residential high-rise
H+H wall building solutions also include solid and
partition wall products used in residential high-rise
buildings.
Self-build
H+H wall solutions also support self-build and DIY
projects of any kind. An eco-friendly and easy-to-handle
material for any wall.
Renovation
H+H wall-building solutions are a popular choice for
domestic renovations, extensions, and small building
projects, including energy-efficient improvements.
Our product range is diverse
and its flexibility allows for
various applications. As a
result, the customer segments
are also diverse and provide a
differentiated risk profile.
Our products
Foundations
H+H Foundations Blocks are quick to install and can
be used to support solid or cavity wall constructions as
well as timber frame structures.
External walls
H+H wall elements can also be used for solid external
walls. They offer the fastest building method as well as
unparalleled air tightness and insulation.
Internal walls
Partition walls built with H+H wall materials meet any
sound-insulation requirements and are quick and easy
to install.
A strong solution in sustainable building
Products and solutions
Management’s review | Our business
15 | H+H Annual Report 2022
Corporate strategy and growth platform
We will continue to pursue
profitable organic growth, as
well as opportunities to expand
both our geographical footprint
and offerings within adjacent
products and wall systems. We will
focus on opportunities offering
synergies and providing us with a
more diversified exposure in the
growing market of affordable and
sustainable housing in Europe.
Differentiated market approach
We firmly believe that collaboration creates lasting
value – both for the customers, suppliers and other
stakeholders. By understanding industry trends,
our customers and their specific needs, we can help
them solve challenges, eliminate waste and manage
complexities throughout the building process with the
aim of building affordable, long-lasting sustainable
homes. We strive to be the ideal partner and a one-stop-
shop for every wall-building project, while also assisting
in optimising the building process and the carbon
emissions from a life-time perspective.
Our value proposition is to be a trusted partner to all
customers across our markets, aiming to add value at
every stage of the building process. We are constantly
striving to find new ways to improve our products and
building concepts to make building better, easier and
more efficient to everyone involved – from sourcing and
production to distribution and building sites.
Optimisation of production network
The markets in which we operate hold attractive long-
term growth opportunities due to the demographic
profile and the political drive to secure adequate
housing, and we have a strong track record as a
market consolidator. Generally, and as previously
communicated, the European housing markets are still
expected to continue growing, supported by the longer-
term effects of a structural undersupply of housing,
demographic growth and urbanisation. We remain
strongly positioned to take advantage of these longer-
term trends and will be investing in further enhancing
our position over the coming years.
Following the successful consolidation of the German
and Polish white-stone markets, which has formed a
solid platform for long-term growth and value creation,
we will to a larger degree focus our strategic efforts on
optimising and strengthening our production platform.
This may be done via investments in optimising the
existing factory network allowing for further efficiency
gains, investments in additional capacity and a
continued focus on innovation and sustainability.
Our Continuous Improvement programme has shown
good results since its introduction in 2019. The
programme is a long-term commitment to deliver
sustainable margin improvements. We will continue
our focus on improving energy efficiency, improving
raw-materials consumption, reducing waste and
increasing factory up-time across our footprint.
We also see great potential in the British ‘Modern
Methods of Construction’ (MMC) initiative, including
marketing of our pre-cast wall-panel solutions (i.e.,
storey-height aircrete panels) to the British market
as well as a continued focus on the marketing of our
thin-joint masonry solutions where mortar is replaced
by glue, thereby creating a thinner joint between
the individual blocks which results in faster laying
and improved productivity. Both solutions provide
improved efficiency at the construction sites, but are
also expected to result in incremental sales volumes
for H+H.
The addition of capacity through the construction of
new factories or the expansion of existing production
facilities will also be within our strategic scope. The
expansion of the AAC factory in Reda in Poland with a
new CSU production line was completed in Q3 2022, and
in 2023 we will upgrade our capacity at Borough Green,
UK.
Profitable growth through acquisitions
We want to continue our profitable growth through
acquisitions and have the financial strength to further
strengthen our position through acquisitions offering
synergies and a more diversified exposure in a growing
market. We see good opportunities to grow and expand
both our geographical footprint as well as our offerings
within adjacent products and wall systems.
We have a strong track record when it comes to buying
solid companies and integrating them both fast and
successfully from consolidating the European white-
stone-market in recent years, with the acquisition of
24 factories. These factories have contributed to a
significant expansion of our factory network and have
more than tripled our white-stone businesses in both
Germany and Poland. This has significantly increased
our geographic footprint, revenue and earnings
and positions us well for continued growth through
acquisitions.
Management’s review | Our business
16 | H+H Annual Report 2022
In 2021, we acquired an aircrete factory located in
Feuchtwangen in Bavaria, Germany, and 52.5% of the
shares in DOMAPOR Baustoffwerke GmbH & Co. KG
(DOMAPOR), a German manufacturer of aircrete and
calcium silicate blocks located in Mecklenburg-West
Pomerania.
We maintain a pipeline of potential acquisition targets
and may pursue any of these should they add value
to our existing operations. We may therefore continue
to engage in acquisitions of targets with attractive
geographical locations and/or modern and well-run
production facilities. We remain in a unique position to
pursue further expansion of our German production
footprint, as we have both the necessary financial
strength and a proven track record of integration and
restructuring from recent years’ acquisitions.
Entrance into new markets.
We also see relevant growth opportunities through
expansion of activities into geographies with high levels
of market penetration for AAC and CSU products. The
market structures and associated risk profiles differ
from market to market – particularly for AAC as the
product category has a larger geographical reach. We
are continuously monitoring the market and have the
financial means to benefit from opportunities arising
and creating market-leading positions should targets
be available. The expansion of our product offering with
other wall-building materials may potentially also offer
relevant growth opportunities and synergies.
Packaging line in
Reda, Poland
Management’s review | Our business
17 | H+H Annual Report 2022
Completion of our new CSU factory
in Gdan´sk, Poland
Our new plant affords us a number of key benefits;
closer proximity to our CSU customers in a densely
populated area of Poland, synergies across channels for
sales and marketing and a factory with sustainability
built in the start.
The factory was approved in January 2019, but building
commencement was delayed to 2021 due to the COVID
pandemic. The factory currently operates in its first
phase with an automatic production line and with a
production capacity of 50,000-60,000 m
3
. Phase two,
will increase capacity to 90,000-100,000 m
3
per year.
In July 2022, H+H opened a new plant near Gdan´sk,
Poland. The new plant has been built next to the existing
AAC plant and is the first factory in Poland capable of
producing both AAC and CSU.
The new CSU plant is built with a focus on sustainability.
The production line has been built from refurbished
machinery and materials; it operates ecologically based
on the principle of zero waste with a very efficient use
of water in the production processes. Also, the plant
operates on high standards as regards to health and
safety.
The new CSU factory has a
capacity of up to 60,000 m
3
annually in its phase one, corre-
sponding to approximately 3%
of the current CSU market.
Management’s review | Our business
18 | H+H Annual Report 2022
Sustainability strategy
Environment Social Governance
Sustainable buildings Climate & environment Health, safety, and people Business integrity
By 2030, reduce
Scope 3 GHG
emissions 22% per
m
3
from a 2019 base
year
By 2050, achieve
net-zero emissions
in H+H products
By 2030, reduce
absolute Scope 1 and
2 GHG emissions by
46% from a 2019
base year, equivalent
to a 4.2% reduction
each year
By 2024, reduce
energy consumption
per m
3
by 7% vs.
2019 base line of 565
MJ per m
3
By 2024, reduce
water usage by 5%
vs. 2019 base line of
382 litres per m
3
By 2024, achieve
zero waste to landfill
By 2050, achieve
net- zero emissions in
H+H’s operations
By 2024, reduce
absenteeism to 9
days per annum,
including absentee-
ism from long-term
illness
By 2024, reduce
lost time incidents
frequency (LTIF)
to 3.5
Have gender diversity within
the Board of Directors of H+H
International A/S to minimum
25-40% of the under-repre-
sented gender
We want to enhance our product portfolio
through more sustainable products and
application methods, that improve energy
efficiency and lower the life-cycle emissions
of buildings.
We partner with cement and lime
manufacturers to test low-carbon products
to reduce our Scope 3 emissions and are
committed to achieving net-zero emissions
from our products by 2050.
We aim to reduce our Scope 1 and 2 emissions, achieve net-zero emissions from operations,
and continuously improve resource use through enhanced environmental management and
strategic sourcing of raw materials.
In regards to circular economy, we have three sub-streams focusing on this matter - a ‘no waste
of virgin materials’ principle, a ‘brick-to-brick’ approach, and a ‘building-to-building’ approach.
We strive for zero harm to our people
through improved behavioural and
automation levers, to provide a healthy
working environment as well as continuing to
be an attractive employer to attract, retain,
and develop our talent pool.
We aim to always conduct
our business in an honest,
ethical, and socially
responsible manner and to
drive compliance with laws,
anti-trust guidelines, and
sustainable sourcing.
Read more about H+H’s Sustainability Strategy on www .hplush. com/ sustainabilit y-reports
We have reported separately on corporate social responsibility in our sustainability report for 2022,
in accordance with section 99a of the Danish Financial Statements Act.
Management’s review | Our business
19 | H+H Annual Report 2022
Sustainability highlights
During 2022, we executed on our plans to meet our ESG commitments.
The results show a positive development towards our targets.
Net-zero
by
2050
We are committed to achieving
net-zero emissions in our operations
and products by 2050.
Reduced carbon
emissions
5%
lower Scope 1 and 2 emissions
compared to our Science Based target.
Steady safety
performance
3.6
Lost-Time Incident Frequency
(LTIF) versus a target of 5.
UN Global Compact
Sustainable Development Goals (SDGs)
Our products support SDG-11 (Sustainable cities and communities) and SDG-12 (Responsible consumption and production).
Lower water
usage
3%
reduction in water intensity
versus 2019 base year.
H+H has carbon reduction
targets verified and
approved by the SBTi
1.5°C
We are on track in reducing our own
emissions in line with the 1.5-degree
scenario in the Paris Agreement.
Results 2022 Long-term targets
Management’s review | Our business
20 | H+H Annual Report 2022
Investing in state-of-the-art
energy equipment
As part of this ongoing process, H+H UK was granted
funds to install new gas burners at our Pollington site.
Gas burners are an integral part of the boiler system
used to generate the steam which is used to ‘bake’ the
AAC block in our autoclaves.
Through thorough internal and external analysis,
replacing the 21-year-old old gas burners was identified
as a high impact investment for reducing our CO
2
emissions. This initiative was enabled by developments
in gas burning technologies.
The burners were successfully installed in Q3 2022 with
the subsequent data showing significant reduction in
gas usage. To date, we have already seen gas savings of
up to 4% in consumption levels, saving more than 600
tons in CO
2
emissions on an annual basis.
To ensure that we are prepared for future renewable
energy sources, the new burners are compatible
with hydrogen as a base fuel. Furthermore, we are in
continuous dialogue with local governments about
the possibility of changing to hydrogen supply, once
capacity becomes available in the UK.
As a result of the successful implementation of the
new burners, we are already preparing to replicate
this initiative at our Borough Green site whilst also
preparing separate analyses of potentially replacing
burners in our other regions.
Newly installed burn-
ers in Pollington which
save up to 600 tonnes
CO
2
annually.
Sustainability is an embedded part of our value proposition
and operations, and we allocate capital specifically to CO
2
,
NOx and greenhouse gas reduction initiatives.
Management’s review | Our business
21 | H+H Annual Report 2022
Summary of strategic targets
Financial targets Sustainability targets
EBIT margin
before special items
H+H commits to reducing absolute
Scope 1 and 2 greenhouse gas emissions by
H+H commits to reducing
Scope 3 greenhouse gas emissions by
12% 46%
22%
13% in 2022 by 2030 compared to 2019
per kg CO
2
e/m
3
by 2030 compared to 2019
Financial gearing
Net interest-bearing debt to
EBITDA before special items
1-2x
0.7x in 2022
Return on
invested capital
16%
19% in 2022
Note: The Group’s long-term financial targets reflect the ambition to maintain average levels through a full business cycle.
Net-zero emissions
H+H commits to achieving net-zero emissions
in our operations and products by
2050
22 | H+H Annual Report 2022
Management’s review | Our business
A WORD FROM THE CFO
Pricing execution key in
challenging market
2022 was largely driven by
high demand for our products,
continuing the trend of recent
years. During Q3 we saw a change
in market dynamics, and permits
started decreasing primarily due
to higher interest rates and the
continued strong inflationary
pressures.
Navigating the high inflationary environment with
declining demand is challenging, but our principle of
passing on inflation remains clear, and we will keep
monitoring the market closely. Additionally, we will
focus on cost saving measures to mitigate the impact
on our bottom line.
Despite these headwinds, I am proud to report that
we have delivered strong financial results for the year.
Revenue for 2022 reached DKK 3,604 million, a 19%
increase over the previous year. This growth was driven
mainly by price increases, as we successfully passed on
the higher input costs.
Non-financial reporting is key to
support our ESG journey
A key initiative we have undertaken during 2022 is
to strengthen our non-financial reporting practices
to accommodate new reporting requirements. In our
journey towards net zero, strengthening our reporting
platform is critical and we are committed to provide
meaningful insights into our ESG performance.
Hence, to support this, we have implemented new
reporting tools which together with a common
business intelligence system will support performance
management.
In addition, in 2022, we successfully upgraded the
Polish market to our ERP platform which now covers
the majority of our markets. We expect the remaining
markets to follow during 2023.
The upgrade ensures further scalability, efficiencies
and standardised processes across our business as
well as establishing the foundation for further use of
technology to improve our competitiveness and our
service to our customers.
New sustainability-linked financing
On 1 March 2023, H+H signed a new multi-currency
sustainability-linked financing agreement with Nordea.
The agreement includes a committed term loan of DKK
400 million and a committed Revolving Credit Facility
of DKK 600 million. In addition, the agreement includes
an uncommitted accordion facility of DKK 1,100 million.
The agreement replaces our previous agreement and
runs for three years until 2026 with an option to extend
the agreement for two additional years. The terms of
the agreement are favorable compared to the previous
agreement and support the robustness of H+H.
The specific sustainability-related objectives linked
to the financing agreement are closely related to our
strategy and incorporate sustainability performance
targets related to a reduction of absolute Scope 1 and 2
GHG emissions and the Lost Time Incident Frequency
(LTIF), which are both key strategic KPIs. The inclusion
of these targets underpins our strong commitment to
our journey towards net zero and it demonstrates how
ESG is integral to all aspects of our business. I am also
pleased that the financing agreement together with
our continuing strong cash generation supports our
strategic growth.
Resilience measures to prepare
for lower demand cycle
After many years of high activity in the building
industry, building permits are currently declining
across our markets. We expect this to impact market
demand in combination with continuing high input cost
pressure.
As a consequence we will continue to focus on
tight cost control and risk management, and we
will drive efficiencies at our factories to maintain
our strong financial foundation. Over the years, we
have maintained a disciplined approach to capital
expenditures which has enabled us to maintain
financial flexibility and to make strategic investments
in our business, even when facing lower demand. I am
confident in our ability to navigate and shift gears when
needed. We have a robust plan in place, and we remain
focused on delivering value to our shareholders.
Peter Klovgaard-Jørgensen
Chief Financial Officer
Management’s review | Performance
24 | H+H Annual Report 2022
Full year 2022 financial review
Income statement
Revenue
Total revenue increased by 19% to DKK 3,604 million
compared to DKK 3,020 million in 2021. Revenue
growth before acquisitions and divestments (organic
growth) was 14% compared to 13% in 2021.
Organic growth was driven by the continued
implementation of sales price increases to counter the
continued strong inflationary pressures, offset by lower
sales volumes as a result of lower production output
primarily due to the planned upgrade of the Wittenborn
factory in Germany as well as a softening of sales
volumes in Poland.
Revenue in Central Western Europe amounted to
DKK 1,611 million compared to DKK 1,399 million in
2021. Organic growth was 2% mainly driven by price
increases in both product categories.
Revenue in the UK amounted to DKK 1,052 million
compared to DKK 884 million in 2021. At 18%, organic
growth was driven by higher sales prices.
Revenue in Poland was DKK 941 million compared to
DKK 737 million in 2021. Organic growth was positive
by 31% mainly driven by higher sales prices for both
product categories.
Of total revenue of DKK 3,604 million, AAC accounted
for 71%, while CSU accounted for 29%, on a par with
2021 where total revenue amounted to DKK 3,020
million.
Production costs
Production costs were impacted by increasing prices of
raw materials as well as higher transport prices in the
UK resulting from high demand pressure.
Furthermore, the planned upgrade of the Wittenborn
factory resulted in a relatively lower production output
and higher production costs in the period.
Gross profit before special items
Gross profit before special items increased by 13%
to DKK 1,020 million compared to DKK 905 million
in 2021, corresponding to a gross margin before
special items of 28% compared to 30% in 2021. The
gross margin was adversely impacted by increasing
production costs.
Gross profit in the AAC business was DKK 713 million,
corresponding to a gross margin of 28%. Gross profit in
the CSU business was DKK 307 million, corresponding
to a gross margin of 29%.
EBITDA before special items
EBITDA before special items increased by 11% to DKK
657 million compared to DKK 591 million in 2021,
corresponding to an EBITDA margin before special
items of 18% compared to 20% in 2021.
The lower EBITDA margin before special items is a
result of increasing prices of raw materials and higher
production costs while sales and administrative costs
remained relatively stable.
Depreciation and amortisation before special items
Depreciation and amortisation before special items
amounted to DKK 202 million against DKK 183 million
in 2021.
EBIT before special items
EBIT before special items increased by 12% to DKK 455
million in 2022 compared to DKK 408 million in 2021,
corresponding to an EBIT margin before special items
of 13% compared to 14% in 2021.
Special items
Special items for 2022 were negative by DKK 42 million
compared to DKK 31 million in 2021.
Special items for 2022 comprise additional transport
costs related to a factory upgrade in Germany, the
acquired AAC factory located in Feuchtwangen in
Bavaria, Germany as well as costs related to changes to
Group and regional Management.
Recognition of special items has affected the following
lines of the income statement: Cost of goods sold (DKK
25 million) and administrative costs (DKK 17 million).
Please refer to note 7 for more information.
EBIT
EBIT increased by 10% to DKK 413 million compared to
DKK 377 million in 2021.
Net financials
Net financials totalled an expense of DKK 15 million
compared to an expense of DKK 21 million in 2021.
Profit before tax
Profit before tax increased by 12% to DKK 398 million
compared to DKK 356 million in 2021.
Tax
Tax expense increased to DKK 81 million compared
to an expense of DKK 35 million in 2021. The
relativly lower tax in 2021 was driven by deferred tax
adjustments related to acquired companies in prior
years.
Profit for the period
Profit for the period totalled DKK 317 million compared
to DKK 321 million in 2021.
Profit for the period attributable to H+H International
A/S’s shareholders was DKK 303 million and DKK 14
million attributable to non-controlling interest. For
2021, the profit attributable to H+H International A/S’s
shareholders and to non-controlling interest was DKK
310 million and DKK 11 million, respectively.
Management’s review | Performance
25 | H+H Annual Report 2022
Other comprehensive income
Other comprehensive income was net zero compared
to a positive amount of DKK 45 million in 2021. The
year-on-year movement was a result of movements
in value adjustment of net pension obligations less
deferred tax of a negative amount of DKK 19 million and
foreign exchange less deferred tax of negative DKK 26
million.
Further details can be found in the section Statement of
changes in equity.
Cash flow
Operating activities
Cash flow from operating activities decreased by 30%
to DKK 316 million compared to DKK 454 million in
2021, primarily driven by higher EBITDA which was
offset by a negative development in working capital
development due to an increase in stock.
Investing activities
Cash flow from investing activities was negative by DKK
255 million compared to a negative amount of DKK 427
million in 2021. The year-on-year decrease was mainly
driven by acquisitions of entities in 2021 of DKK 238
million.
Capital expenditures totalled DKK 266 million
compared to DKK 197 million in 2021.
Free cash flow
Free cash flow amounted to DKK 61 million against DKK
27 million in 2021.
Financing activities
Cash flow from financing activities was negative by
DKK 19 million compared to a negative amount of DKK
25 million in 2021. The year-on-year development was
driven by an increase in purchases of treasury shares
under the share buy-back programme which was offset
by a change in borrowings.
Balance sheet
The balance sheet total at 31 December 2022 was DKK
3,750 million compared to DKK 3,400 million at 31
December 2021.
Financing
Net interest-bearing debt totalled DKK 492 million at 31
December 2022, an increase of DKK 142 million since
31 December 2021.
The increase in net interest-bearing debt since the
beginning of the year was primarily driven by capital
expenditures and the purchase of treasury shares and
was partly offset by earnings for the period.
At 31 December 2022, financial gearing was 0.7x net
interest-bearing debt to EBITDA before special items,
which is comfortably below the Group’s long-term
financial target of 1-2x EBITDA before special items.
Net interest-bearing debt excluding leasing totalled
DKK 384 million at 31 December 2022, corresponding
to an unused committed bank facility of DKK 0.6 billion.
Equity
Equity increased by DKK 124 million to DKK 1,938
million.
Net gains recognised directly in equity comprise profit
for the year of DKK 317 million, a value adjustment of
pension obligations less deferred tax of DKK 17 million
and foreign exchange adjustments of investments in
foreign entities of a negative amount of DKK 17 million.
Other changes to equity comprise adjustment to
recognition of non-controlling interests arising from
the acquisition of the majority stake in DOMAPOR
of a negative amount of DKK 22 million, recognised
costs for share programmes of DKK 4 million, dividend
to non-controlling interest of DKK 6 million and the
purchase of treasury shares of DKK 169 million.
Please refer to note 4 “Staff costs”, note 19 “Share
capital and treasury shares”, note 20 “Pension
obligations” and note 25 “Business combinations” for
further information.
Equity attributable to H+H International A/S’s
shareholders and to non-controlling shareholders was
DKK 1,842 million and DKK 96 million, respectively.
Return on invested capital (ROIC)
Return on invested capital was 19% compared to 20%
in 2021.
Management review for
the parent company
Profit for the year was DKK 108 million compared to
DKK 267 million in 2021. The decrease of DKK 159
million against last year was driven by dividend received
in 2022 of DKK 102 million compared to DKK 280
million in 2021.
Events after the balance sheet date
On 1 March 2023, a new committed credit facility was
agreed with Nordea Danmark, a branch of Nordea Abp,
Finland, subject to H+H’s fulfilment of certain formal
requirements. The agreement has a duration of 3 years
and has been secured on attractive market terms.
Other than above, no events have occurred after the
balance sheet date that will have a material effect on
the parent company’s or the H+H Group’s financial
position.
Management’s review | Performance
26 | H+H Annual Report 2022
Financial outlook
Changes to the guidance during 2022
The initial outlook for 2022 was introduced on 3 March
2022 in connection with the release of the 2021 Annual
Report after record earnings and solid organic growth.
The initial guidance for 2022 reflected the swift recovery
of the European housing market following the Covid-19
pandemic The first half of the 2022 was fuelled by
continued high activity and customer demand. We
demonstrated our ability to negotiate sales price
increases to offset the inflationary pressure and the
financial guidance was therefore upgraded in May
2022. The changed geopolitical and macroeconomic
2023 financial outlook
Revenue growth measured in local currencies is
expected to be around 0%.
EBIT before special items is expected to be in the
range of DKK 330 - 400 million.
Assumptions for the financial guidance for 2023
The expectations for H+H’s financial performance in
2023 are based on a number of specific and general
assumptions. Management believes that the most
significant of these assumptions relate to the following
items:
Specific assumptions:
• Sales volumes expected to decrease around 10-15%
in aggregate mainly driven by Poland.
• Further cost increases in 2023 expected, which are
passed on through sales price increases.
• Exchange rates, primarily GBP, EUR and PLN remain
at end-February 2023 levels.
General assumptions:
The expectations for H+H’s financial performance
are also based on a number of general assumptions.
Management believes that the most significant
assumptions underlying H+H’s expectations relate to:
• Sales volumes and product mix
• Price competition
• Developments in the market for building materials
• Distribution factors
• Weather conditions
• Macroeconomic and geopolitical developments
• Operational uptime at H+H’s production plants
including supply of energy and raw materials
landscape led to decreased visibility coupled with the
continued high-inflation environment, and softening
market demand led to a narrowing of our financial
guidance in November 2022. The realised results for
2022 were within the recent guidance range, reflecting
a softening of market demand in Q4.
Original
guidance
3 March 2022
Organic growth
10-15%
EBIT
1)
420-500
(DKKm)
1)
Before special Items
Upgrade
6 May 2022
Organic growth
15-20%
EBIT
440 -520
(DKKm)
Narrowed
10 November
2022
Organic growth
~15%
EBIT
440-470
(DKKm)
Realised
results
1 March 2023
Organic growth
14%
EBIT
455
(DKKm)
Management’s review | Performance
27 | H+H Annual Report 2022
Comments relating to the
fourth quarter of 2022
Revenue
Total revenue increased by 11% to DKK 810 million
compared to DKK 731 million in 2021. Revenue growth
before acquisitions measured in local currencies
(organic growth) was positive 9% compared to positive
11% in 2021.
Organic growth for Q4 was mainly driven by price
initiatives across our regions, partly adjusted by lower
volumes.
Gross profit before special items
Gross profit before special items was DKK 202 million
compared to DKK 216 million in 2021, corresponding to
a gross margin before special items of 25% and 30%,
respectively.
Gross margin was negatively impacted by increasing
production cost and maintenence shut downs.
EBITDA before special items
EBITDA before special items was DKK 111 million
compared to DKK 139 million in 2021.
Depreciation and amortisation before special items
Depreciation and amortisation before special items
amounted to DKK 53 million compared to DKK 45
million in 2021.
EBIT before special items
EBIT before special iitems was DKK 58 million
compared to 94 million in 2021 , corresponding to an
EBIT margin before special items of 7% compared to
13% in 2021 mainly driven by higher production costs.
Special items
Special items amounted to DKK 14 million, against DKK
27 million in 2021.
Special items for Q4 2022 comprise additional
transport costs related to a factory upgrade in Germany
as well as costs related to changes to Group and
regional Management.
EBIT
EBIT amounted to DKK 44 million compared to DKK 67
million in 2021.
Net financials
Net financials totalled an expense of DKK 3 million
compared to an expense of DKK 5 million in 2021.
Profit before tax
Profit before tax was DKK 41 million compared to DKK
62 million in 2021.
Tax
Tax totalled an expense of DKK 7 million compared to
an income of DKK 29 million in 2021. The tax income in
2021 was driven by deferred tax adjustments related to
acquired companies in prior years.
Profit for the period
Profit for the period was DKK 34 million compared to
DKK 91 million in 2021.
Profit for the period is attributable to H+H International
A/S’s shareholders by DKK 28 million and to
non-controlling interest by DKK 6 million. For Q4 2021,
profit was attributable to H+H International A/S’s
shareholders by DKK 83 million and to non-controlling
interest by DKK 8 million.
Other comprehensive income
Other comprehensive income amounted to positive
DKK 79 million compared to positive DKK 22 million
in 2021, driven by actuarial gains net deferred tax
of positive DKK 36 million in relation to pension
obligations and foreign exchange adjustment related to
foreign entities of positive DKK 21 million.
Please refer to the section “Statement of changes in
equity” for more information.
Cash flow
Operating activities
Cash flow from operating activities amounted to DKK
29 million compared to DKK 77 million in 2021, mainly
driven by negative working-capital developments from
increase of stock.
Investing activities
Cash flow from investing activities was negative by
DKK 106 million, compared to negative DKK 195 million
in 2021, mainly as a result of cash flow related to the
acquisition of the majority stake in DOMAPOR in 2021.
Capital expenditures for 2022 amounted to DKK 117
million compared to DKK 92 million in 2021.
Free cash flow
Free cash flow was negative DKK 77 million compared
to DKK 118 million in 2021 mainly as a result of the
aforementioned.
Financing activities
Cash flow from financing activities was positive DKK 73
million, compared to negative DKK 56 million in 2021,
primarily driven by change in borrowings.
Q4 2022 key figures
Management’s review | Performance
28 | H+H Annual Report 2022
Q4 2022 results (unaudited)
Group Group
(DKK million) 2022 Q4 2022 Q3 2022 Q2 2022 Q1 2022 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Income statement
Revenue 3,604 810 920 1,000 874 3,020 731 811 836 642
Gross profit before special items 1,020 202 254 320 244 905 216 250 251 188
EBITDA before special items 657 111 160 227 159 591 139 171 172 109
EBIT before special items 455 58 110 177 110 408 94 125 125 64
Profit after tax for the period 317 34 82 129 72 321 91 88 93 49
Balance sheet
Investments in property, plant and equipment 266 117 65 42 42 197 92 44 34 27
Cash flow
Cash flow from operating activities 316 29 101 207 (21) 454 77 176 206 (5)
Cash flow from investing activities (255) (106) (65) (42) (42) (427) (195) (171) (34) (27)
Cash flow from financing activities (19) 73 (22) (70) 0 (25) (56) 1 (16) 46
Financial ratios
Organic growth 14% 9% 7% 13% 29% 13% 11% 13% 39% (9%)
Gross margin before special items 28% 25% 28% 32% 28% 30% 30% 31% 30% 29%
EBITDA margin before special items 18% 14% 17% 23% 18% 20% 19% 21% 21% 17%
EBIT margin before special items 13% 7% 12% 18% 13% 14% 13% 15% 15% 10%
Management’s review | Performance
29 | H+H Annual Report 2022
Financial policy and capital allocation
Financial policy
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.e., through a business cycle) for
the financial gearing ratio is 1-2x EBITDA before special
items. The ratio may exceed this level from time to time
following certain significant acquisitions.
Capital allocation priorities
Our free cash flow allocation priorities are unchanged
from previous years:
1. Repay of net interest-bearing debt in periods when
the financial gearing ratio is above the long-term
target range;
2. Pursue value-adding investments in the form of
acquisitions or development of the existing business;
and
3. Distribute of capital to the shareholders by means of
share buy-backs and/or dividends.
Distribution of capital to shareholders
Supported by the continued strong earnings and free
cash flow generation, which has resulted in a financial
gearing comfortably below the Group’s long-term
target of 1-2x EBITDA, H+H initiated a share buy-back
programme on 4 March 2022 of up to DKK 150 million.
The share buy-back programme was completed on 3
January 2023. A total of 1,118,800 shares were bought
back under the programme at an aggregate purchase
price of DKK 150 million.
1
Investments in property, plant and equipment excludes effects from IFRS 16
2
Net interest-bearing debt to EBITDA before special items
3
In 2018, ROIC was negatively impacted by a one-off related to the acquisition and integration of the German and Polish businesses and impairment of fixed assets in Russia. Adjusted for these items, ROIC in 2018 would have been 17%
Please refer to Company Announcement no. 469 of 3
March 2022 for more information.
For the time being, H+H expects to use the free cash
flow to develop the existing business and pursue value-
adding investments within the debt gearing indicated.
DKKm
2018 2019 2020 2021 2022
0
60
120
180
240
300
Capital expenditure
1
Invested capital and Return on invested capital (ROIC)
3
Financial gearing
2
DKKm %
2018 2019 2020 2021 2022
0
500
1,000
1,500
2,000
2,500
0
5
10
15
20
25
DKKm
2018 2019 2020 2021 2022
0.0x
0.4x
0.8x
1.2x
1.6x
2.0x
Capital expenditure Invested Capital
ROIC
Financial gearing
Long-Term target ratio
Management’s review | Performance
30 | H+H Annual Report 2022
Our geographical footprint
Share of Group revenue in 2022
(DKKm)
Share of Group revenue in 2022
(DKKm)
Share of Group revenue in 2022
(DKKm)
45% 29% 26%
Central Western Europe The United Kingdom Poland
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 a leading position in most
of our markets with solid market
shares and strong customer
relationships.
Management’s review | Our markets
32 | H+H Annual Report 2022
0
400
800
1,200
1,600
2,000
DKKm %
2018 2019 2020 2021 2022
-5
-2
1
4
7
10
Central Western
Europe
In 2022, Central Western Europe
was affected by general uncertainty
in the market, increased production
costs, our factory upgrades and
lower demand towards the end of
the year.
15
Factories
644
Employees
1,611
2022 revenue, DKKm
2%
2022 organic growth
1
Germany only
Revenue and organic growth
Revenue
Organic growth
Sales and administration
Aircrete factories
Calcium silicate factories
~20%
AAC market share
1
~14%
CSU market share
1
Management’s review | Our markets
33 | H+H Annual Report 2022
Germany
Market conditions and trends
2022 started with mild weather conditions, and an
easing of supply chain bottlenecks gave rise to a
rebound in the construction activity including demand
for our products. However, high inflation, risk related
to energy supply and increasing interest rates led
to decreased consumer confidence, and as a result
private consumption was affected for the remainder
of the year. In 2022, the number of building permits
issued decreased approximately 13% from January to
November compared to the same period last year.
Overall capacity utilisation for the building materials
industry is generally high, and only minor capacity
expansions were undertaken in the AAC and CSU
industry during 2022. Overall, pricing in both product
segments continues to follow positive trajectories as
increasing input costs are passed on.
In 2023, economic growth is projected to remain flat
hampered by the effects of inflation and energy supply
and to recover by 2024
1
. Currently, unemployment rates
are stable, and investment levels are under pressure,
underpinned by high interest rates, which all in all put
pressure on the activity in the construction industry
2
.
In general, residential building capacity in Germany
has been an ongoing issue in recent years. The German
government have set the objective to build 400.000
new dwellings p.a. in the next years. In 2022, 293.393
new dwellings were completed.
The growing demand for housing, have resulted
in more permits being issued than housing being
completed causing the order backlog among
housebuilders to increase significantly over the past
few years. Political attempts have been made to offset
the structural undersupply through incentive schemes
to homeowners and targeted funding programmes for
land availability and development. However, we are yet
to see the full effect of these initiatives, which suggests
a solid foundation for continued high construction
levels in the medium term.
Key developments in 2022
During 2022, our focus was to integrate the two
acquisitions made in late 2021 and to upgrade our
AAC factory in Wittenborn located in the northern part
of Germany. The acquired AAC and CSU Domapor
factories in Northeast Germany had a successful year
with efficient production and high output. The other
acquired AAC factory in Feuchtwangen in Bavaria
ramped up production gradually during the year
to support AAC across Germany and in particular
southern Germany. The upgrade of Wittenborn finished
in the last quarter of 2022, negatively impacted our
production volumes during 2022. The upgrade leaves
the factory well positioned to meet our ESG roadmap.
Our German activities continue to offer strong
potential. Recent acquisitions have established a
solid footprint across Germany, and we have taken
considerable synergies from sales and administration.
However, further synergies are being worked on by
stronger utilisation of the plant network.
In 2022, we successfully negotiated sales price
increases to offset higher input costs and we expect
this to continue in 2023.
Other markets
Increasing prices of raw materials, long delivery times
and challenging transport were key headlines in the
Nordic market in 2022. However, building activity was
strong for most of the year and especially the project
market performed well. In the last part of the year,
building activity started to decline, and we are seeing
signs of a slowdown going into 2023 on the back of
inflation and uncertainty.
The same trend was seen in our other markets in the
region, which performed strongly in the first half of
2022 but slowed down towards the second half as
inflation rates, input prices and general uncertainty
affected the purchasing power.
Crane unloading
new autoclave
in Wittenborn,
Germany
1
OECD Economic Outlook, Volume 2022 Issue 2.
2
Deutsche Bundesbank Monthly Report December 2022.
Management’s review | Our markets
34 | H+H Annual Report 2022
0
300
600
900
1,200
1,500
DKKm %
2018 2019 2020 2021 2022
-30
-17
-4
9
22
35
The United
Kingdom
2022 demonstrated the robustness
of the British construction industry
with high demand. Short-term
market drivers point to growth
deterioration, but longer-term
prospects remain favourable driven
by a strong undersupply of housing
and government ambitions.
3
Factories
243
Employees
1,052
2022 revenue, DKKm
18%
2022 organic growth
>40%
AAC market share
Revenue and organic growth
Revenue
Organic growth
Sales and administration
Aircrete factories
Calcium silicate factories
Management’s review | Our markets
35 | H+H Annual Report 2022
Market conditions and trends
During 2022, the private housing market showed
resilience to changing macroeconomic conditions
and maintained high levels of activity, while the wider
economy started to shrink. This was driven by the
general shortage of housing and a strong order backlog
from the beginning of the year. Towards the end of the
year, market demand slowed down and housebuilders
reported decreasing sales rates in Q4.
Uncertainty due to the economic and geopolitical
situation weighs heavily on the UK economy which is
expected to contract slightly in 2023 and remain flat in
2024
1
. Although the general construction order book
in the UK is expected to serve as a cushion ahead of
a potential slowdown, demand for new dwellings is
expected to decrease by around 10% impacted by
uncertainty, inflation and increasing interest rates.
The British government continues to address the
challenges of a structural undersupply of housing
and maintain the ambition of delivering 300,000 new
homes per year. However, new housing supply in the
United Kingdom is currently lower than the British
government’s target. It is estimated that there will
be a need for 3.7 million new households in the next
25 years which is the underlying reason for the need
for increasing the British housing stock through the
construction of new homes. In comparison, a total of
244,000 dwellings were added in 2022, representing
the highest level in more than 30 years but still short of
the Government’s target.
Key developments in 2022
As inflation levels were on the rise during 2022,
we continued to focus on offsetting the input cost
increases through sales price increases in close
dialogue with our customers which we expect to
continue in 2023.
The high activity levels resulted in a continued high
demand for our products. As a result, we focused on the
delivery of core wall products leaving certain market
share to alternative solutions. As the market softens,
we will seek to regain this market share by restoring a
widened product portfolio.
In addition, the British government is promoting
Modern Methods of Construction (MMC). For H+H, this
will include the continued marketing of our pre-cast
wall-panel solutions (i.e., storey-height aircrete panels)
and of our thin-joint masonry solutions to the British
market – both of which will provide improved efficiency
at the construction sites. We continue observing solid
customer interest in these products, and we expect this
trend to continue in the coming year.
We have a clear ambition to remain market leader in the
UK market, which continues to have positive underlying
growth drivers. We are therefore planning to increase
the capacity at our Borough Green factory during
2023. The upgrade is expected to increase our UK
capacity by approximately 10% and is phased to fit with
the year-end maintenance shutdown. Completion is
scheduled during the first quarter of 2024. Depending
on continued growth drivers for the UK market, we see
potential to increase our capacity even further.
H+H UK,
Borough Green
1
OECD Economic Outlook, Volume 2022 Issue 2.
Management’s review | Our markets
36 | H+H Annual Report 2022
0
200
400
600
800
1,000
DKKm %
2018 2019 2020 2021 2022
-10
2
14
26
38
50
Poland
Activity in Poland was high during the
first half of 2022 which translated
into strong demand for our AAC and
CSU products. In the wake of Russia’s
invasion of Ukraine, macroeconomic
risk has risen sharply leading to high
uncertainty and low visibility for
2023.
14
Factories
813
Employees
941
2022 revenue, DKKm
31%
2022 organic growth
20-25%
AAC market share
20-25%
CSU market share
Sales and administration
Aircrete factories
Calcium silicate factories
Revenue and organic growth
Revenue
Organic growth
Management’s review | Our markets
37 | H+H Annual Report 2022
Market conditions and trends
In the first part of the year, demand remained at a very
high level supported by a strong order backlog and
undersupply of rental housing. This allowed for strong
sales price dynamics being ahead of inflationary input
costs in the first half of 2022. However, the war in
Ukraine caused uncertainty which together with a high
inflationary environment caused market demand to
soften. This has lead to a sharp decline dwelling starts
which are down 28% in 2022 year-on-year as well as
building permits issued which is down 13% in 2022
year-on-year.
The number of building permits issued continues to
exceed the number of completions, adding further to
the construction backlog that has been building since
2013 indicating a continued undersupply of housing.
There has been a significant number of refugees from
Ukraine who have sought safety and temporary shelter
in Poland due to the ongoing conflict in Ukraine. The
majority of the Ukrainian refugees in Poland are staying
in government-run reception centers, while others are
staying with host families, in rented apartments, or in
self-organized camps. At the beginning of May 2022,
approximately 1.5 million refugees from Ukraine were
staying in Poland. Two-thirds declared that their stay in
Poland is temporary
1
. It remains unclear to which extent
refugees from Ukraine will impact the Polish housing
markets, but the situation will likely add to the need for
additional new-build construction activity due to the
already significant shortage of housing space in the
country.
In 2023, the Polish economy is expected to slow before
recovering in 2024
2
.
Key developments in 2022
In 2022, the expansion of our Reda AAC factory in
the Northern part of Poland with one additional CSU
production line was completed and is now supplying
the Polish Tri-City near Gdan´sk with up to 60,000 m
3
annually, corresponding to around 3% of the Polish CSU
market. The factory is the first H+H factory in Poland
capable of producing both AAC and CSU in one location
and allows us to supply existing AAC customers with
CSU products.
The new CSU plant is built with a focus on sustainability.
The production line has been built from refurbished
machinery and materials; it operates ecologically based
on the principle of zero waste with a very efficient use
of water in the production processes. Also, the plant
operates on high standards as regards health and
safety.
During 2022, H+H demonstrated our strong agility
operating in the Polish market, taking advantage of
the upside in the first half of the year, while adjusting
capacity in the second half of the year. As a result of
the declining demand, H+H has reduced weekend work
and overtime and is planning the next step of adjusting
capacity. This includes further shift reductions and
potentially temporary factory shutdowns.
In the AAC and CSU markets, pricing continued its
positive trajectory in 2022 thanks to the strong demand
in H1 2022 and pressure from dynamically increased
raw material and energy prices. We expect the pricing
trend to continue into 2023, although at a slower pace.
New CSU factory
Reda, Poland
1
National Bank of Poland,
The living and economic situation of Ukrainian
refugees in Poland.
2
OECD Economic Outlook, Volume 2022 Issue 2.
Management’s review | Our markets
38 | H+H Annual Report 2022
Corporate governance
Corporate governance is a key
aspect of H+H. We continuously
develop and align our governance
structure and principles with our
strategy, input from shareholders
and other stakeholders and
changes in legislation and best
practice standards.
Corporate governance reporting
The Board of Directors and the Executive Board
apply the latest recommendations on corporate
governance issued by the Danish Committee on
Corporate Governance. H+H International A/S abides
by the recommendations in all material respects, and
explanations to the few deviations are provided in a
seperate statement. The statement includes reporting
on our internal controls and risk management systems
applied as basis for the financial reporting process,
and is available at
Governance structure
Shareholders of H+H International A/S exercise their
rights at the general meeting, which is the supreme
governing body of H+H. It is the shareholders who
decide on the Articles of Association which currently
state that the Board of Directors must consist of four to
eight members elected at a general meeting. The term
of all board members expires at each annual general
meeting, but they may be re-elected for a new term.
H+H International A/S has a two-tier management
system under which the Board of Directors and the
Executive Board are responsible for the management
of the Company’s affairs. No persons hold dual
membership of the Board of Directors and the Executive
Board. The Executive Board is responsible for the
day-to-day management of the Group, while the Board
of Directors supervises the work of the Executive Board
and is responsible for the overall management of and
strategic direction for the Group and makes decisions
concerning major investments, the capital base, key
issues within policies, control and audit matters, risk
management and significant operational issues.
To support the Board of Directors and to benefit from
individual members’ competences, the Board of Directors
has established three board committees, namely the
Audit Committee, the Remuneration Committee and
the Nomination Committee. The board committees
are not authorised to make independent decisions, but
must instead prepare reports and recommendations
for the Board of Directors. The members and the Chair
of each board committee are appointed by the Board of
Directors among its members.
Board of Directors
This section includes reporting on H+H management
gender composition and diversity policies in
accordance with section 99b and 107d of the Danish
Financial Statements act. The Board of Directors
annually evaluates its composition to ensure diversity
and that all relevant business competences are
represented among its members. Considering the
H+H Group’s current growth strategy, the main
competences relevant for the Board of Directors
are deemed to be strategy development as well as
executive and in-depth experience in relation to
integration processes for acquired businesses, with a
particular focus on financial and non-financial reporting
(ESG), IT, Strategic HR (recruitment, retention,
diversity), risk management and ESG-driven business
development, as well as innovation, commercial and
operational experience in H+H’s core markets.
The Board of Directors and the Executive Board recognise
the importance of promoting diversity in gender, age,
nationality, international experience and competences.
Pursuant to section 139c of the Danish Companies Act,
the Board of Directors has set a target for the gender
distribution amongst its members, whereby the Board
must seek to ensure that each gender is represented:
• by at least one shareholder-elected member when
the Board of Directors consists of a total of four
shareholder-elected members;
• by at least two shareholder-elected members when
the Board of Directors consists of a total of five to
seven shareholder-elected members; and
• by at least three shareholder-elected members when
the Board of Directors consists of a total of eight
shareholder-elected members.
The aim is to achieve the target no later than by the
annual general meeting to be held in 2023. The target
corresponds to equal gender distribution as defined
by the Danish Business Authority, and the target was
reached at the annual general meeting on 31 March
2022, when our shareholders elected two female and
four male board members.
H+H has a group policy on diversity focusing on diversity
in a broader sense encompassing not only gender, but
also other aspects, including but not limited to age,
education and skills, experience, and geographical and
cultural background. The diversity policy can be found
on the Company’s website at
The Diversity Policy applies to the Board of Directors,
the Executive Board and all other executives and
employees of the Group and has as its purpose to
foster an inclusive and open working climate where
diversity is embraced and promoted. Having a diverse
mix of cultures, backgrounds, genders, skills, expertise
and experiences ensures a dynamic organisation that
continues to develop and advance exactly due to its
diversity, whereas having a monoculture creates a risk of
overlooking relevant opportunities and risks due to the
right questions not being asked.
Diversity in a broad sense is one of the focal points
for the Board of Directors in recruitment searches for
new members for the Board as well as new members
for the Executive Board, but new members must not
be recruited solely based on their contribution to the
diversity, but based on their overall qualifications.
The current Board of Directors and the Executive Board
are considered to be diverse, as the members represent
very different competences and experiences, board
tenures which differ from a few months to more than 12
years, five different nationalities and ages ranging from
Management’s review | Governance
40 | H+H Annual Report 2022
the early 40s up to the mid-60s. The Board of Directors
has an equal gender distribution as defined by the
Danish Business Authority, whereas the the Executive
Board consists of two males, who except for being the
same gender differ with regard to nationality, educational
background, competencies and international experience.
If in connection with a future recruitment process for the
Executive Board, the two final candidates have the same
level of overall competences and one candidate represents
a different gender than the remaining members of the
Executive Bord, that candidate will be preferred.
The broad diversity on the Board of Directors and the
Executive Board is a deliberate achievement where the
diversity gaps are considered right from initiation of
recruitments processes, and the fact that the Board
of Directors’ latest two recruitments were women and
that the international experience of both the Board
of Directors and the Executive Board matches H+H’s
key markets is a testament to the Board of Directors’
conscious work with diversity for several years.
The Board of Directors’ annual evaluation procedure for
2023 was conducted as one-on-one meetings between
the Chair and each board member, and the evaluation of
the Chair was performed by the board member with the
longest seniority. The evaluation included a review of the
diversity and board competencies required. The Board’s
self-evaluation concluded that the gender-diversity target
was met, but that more extensive competences were
needed in respect of the implementation of the growth
strategy as well as measures to meet and leverage the
sustainability targets set. It was therefore decided that
the Nomination Committee should initiate a search
for a relevant additional board candidate with the said
qualifications, and to strengthen not only the Board's
competencies but also resources, the Board found that the
number of board members should be increased to seven.
Accordingly, at the coming annual general meeting to be
held on 30 March 2023, the Board of Directors will propose
that all current board members are re-elected and
that Jens-Peter Saul, German/British, born 1966 CEO
of Ramboll Group A/S, Denmark, is elected as a new
board member. Jens-Peter Saul comes with extensive
international experience particular within strategy
development and execution to accelerate organic and
acquisitional growth and to maximise investments,
general management, as well as broad insights into
sustainability and the green energy transition. He has
experience from diverse industries such as infrastructure,
energy, construction, investment, manufacturing and
trading. Jens-Peter Saul is also member of the Board of
Directors of Cubico Sustainable Investments Limited
(UK) and member of the Board of Directors of Danske
Commodities A/S (Denmark). Jens-Peter Saul will be
deemed an independent member as per the definition
in the Danish corporate governance recommendations.
Board activities during 2022
During 2022, the Audit Committee held five meetings,
the Nomination Committee one meeting and the
Remuneration Committee four meetings. Attendance
rates are shown in the table below. Board members
unable to participate will, except in the case of
non-planned sudden hindrances, read the agenda and
background material for the meeting and then submit
comments and input prior to the meeting to ensure that
the views of all members are considered at the meeting.
Remuneration
Remuneration of the Board of Directors and the
Executive Board is paid in line with H+H's Remuneration
Policy for the Board of Directors and Executive Board as
adopted by the general meeting. H+H also reports on
the remuneration in an annual remuneration report that
is presented to the shareholders at the annual general
meeting for an advisory vote. The Remuneration Policy
and the Remuneration Report for 2022 are available at
www.HplusH.com/remuneration.
Data Ethics Policy
During 2022, we implemented a Data Ethics Policy. As
data becomes increasingly important in our society, it
is key to define and establish rules and guidelines for
the collection, storage and use of data. We strive to
ensure a high and adequate level of data protection,
as we recognise that privacy plays an important role
in gaining and maintaining the trust of our employees,
customers, suppliers, and other stakeholders. While
we do not process large quantities of personal data,
we acknowledge the importance of safeguarding such
data. We further acknowledge that the use of artificial
intelligence may present some ethical dilemmas which
need to be managed appropriately.
We are committed to complying with all applicable
personal data protection laws, including section
99d of the Danish Financial Statements Act. We run
internal audit controls to secure compliance with both
information security and data protection requirements,
and all employees developing, purchasing or otherwise
working with technology and data science-based
uses of data must be informed about the data-ethics
principles. We do not purchase, sell or broker data or
otherwise profit from separate data transfers from
or to third parties. We do not currently carry out
data processing using artificial intelligence, such as
machine learning, as a natural part of our business.
Potential future uses relate to production and logistics
optimisation as well as marketing automation.
When we process personal data or other types of data,
we always apply our standards for data ethics to the
way we work, making sure that our processing activities
and security measures match the requirements for the
data we are handling. Our Data Ethics Policy can be
found on our corporate website via the following link:
Attendance rates at board meetings and board committee meetings in 2022
Audit Nomination Remuneration
Board Meetings Committee Meetings Committee Meetings Committee Meetings
Kent Arentoft Chair
- - Chair Chair
Stewart A Baseley Member
- - Member - -
Volker Christmann Member
Member - - Member
Kajsa von Geijer Member
- - - - Member
Pierre-Yves Jullien Member
Member - - - -
Miguel Kohlmann Member
- - Member Member
Helen MacPhee Member
Chair - - - -
Attendance rate 100% 100% 100% 100%
Management’s review | Governance
41 | H+H Annual Report 2022
Key matters transacted by the Board of Directors during 2022
(including but not limited to)
• Strategy and business plan review and target
setting
• Follow up on M&A activities
• Monitor the Company’s financial policy, debt levels
and capital structure, including approval of a share
buy-back programme of DKK 150 million
• CAPEX planning, including decision to upgrade the
Borough Green factory, UK, to increase capacity by
early 2024
• CAPEX execution review, including upgrades
and maintenance of one of the AAC Wittenborn
production lines, Germany, and the new CSU
production line next to the AAC Reda factory,
Poland
• Review of supply risks and inflated pricing for
especially raw materials and energy
• Review of updated resilience plans
• Review of the Group’s IT policy, IT security set-up
and implementation of ERP system
• Review of the Group’s ERM framework
• Board self-evaluation and recruitment of new
board member with ESG and HR experience
bringing the Board’s gender diversity in
compliance with Danish law
• CEO succession, including recruitment of new CEO
• Establishment of policy approval hierarchy for all
group policies
• Review of the Group’s new whistleblower policy
and organisation
Key matters transacted by the Board Committees
during 2022 (including but not limited to)
The Audit Committee
• Review of the auditors' assurance readiness review
for ESG data reported in the Sustainability Reports
and implementation of measures to ensure H+H
can obtain assurance in accordance with ISAE
3000 for the ESG data in the Sustainability Report
for 2023
• Oversight of ERM, principles and processes
and review of key enterprise risks and related
mitigation plans, including adjustment of the ERM
framework in regard to risk appetite principles
• Monitoring of group insurance strategy, coverage
and pricing
• Review of progress within IT security and
monitoring of implementation of new Group ERP
system
• Review of implementation of new large CAPEX
project management framework
• Monitor the financial reporting process, including
accounting estimates and accounting policies as
well as the integrity of the reporting process
• Review of annual and interim financial reports
• Engagement and audit strategy plan with new
auditors (PwC)
The Nomination Committee
• Search for, interviews with and signing of new CEO
in cooperation with the Remuneration Committee
in respect of remuneration terms
• Annual review and assessment of the composition,
competencies and diversity of the Board of
Directors and search for a new additional board
member to be nominated at AGM 2023
The Remuneration Committee
• Review and propose executive remuneration,
including co-operating with the Nomination
Committee on the contractual remuneration terms
for the new CEO
• Ensuring that actual executive remuneration is
in compliance with the established remuneration
policy and the review of the individual member’s
performance
• Annual review and adjustment proposal for
remuneration of the Board of Directors, the
Executive Board, regional managing directors and
other key personnel
• Propose KPIs and targets for short-term and
share-based long-term incentive programmes
being initiated every year
• Preparation of the annual remuneration report
• Annual review of the Remuneration Policy
Management’s review | Governance
42 | H+H Annual Report 2022
Board of Directors
Kent Arentoft, Chair Stewart Antony Baseley Volker Christmann Kajsa von Geijer
Male. Born 1962. Danish. Male. Born 1958. British. Male. Born 1957. German. Female. Born 1964. Swedish.
Chairman of DSVM Invest A/S and subsidiaries (Denmark). Executive Chairman, Home Builders Federation and
Board member of four subsidiaries (UK).
Managing Director, Senior Vice President Insulation Central Europe,
Member of Group Management of ROCKWOOL A/S. Chairman of
the Board of Directors of two companies in the ROCKWOOL Group,
managing director of five companies in the ROCKWOOL Group and
member of the Board of Directors of ROCKWOOL Foundation.
Senior Vice President HR & Sustainability and member of Group
Management, Thule Group AB (Sweden).
Joined the Board of Directors in 2013. Chairman since 2013.
Member of the Nomination Committee (Chair) and the
Remuneration Committee (Chair).
Joined the Board of Directors in 2010.
Member of the Nomination Committee.
Joined the Board of Directors in 2017.
Member of the Audit Committee.
Joined the Board of Directors in 2022.
Member of the Remuneration Committee.
Indirectly holds 60,000 shares in H+H via a company he controls
with no changes to his holdings during 2022.
Holds 22,500 shares in H+H with no changes to his holdings in 2022. Does not hold any shares in H+H and no changes were made to his
holding during 2022.
Does not hold any shares in H+H and no changes were made to her
holdings during 2022.
Independent as defined in the Danish Recommendations on
Corporate Governance.
Non-independent as defined in the Danish Recommendations on
Corporate Governance (i.e. board tenure for more than 12 years).
Independent as defined in the Danish Recommendations on
Corporate Governance.
Independent as defined in the Danish Recommendations on
Corporate Governance.
Broad organisation and management experience in international
companies in the building materials and contracting sector,
particularly within strategy development and M&A transactions.
Experience in the international housebuilding industry and the
developer industry, particularly in the UK, as well as international
management experience.
Extensive experience within the building materials production sector
of Central Europe, particularly in Germany, as well as within financial
auditing and controlling.
International experience within strategic and operational HR,
sustainability, ESG and general compliance.
Other management positions and directorships Other management positions and directorships Other management positions and directorships Other management positions and directorships
Member of the Board of Directors of Solix Group AB (Sweden)
and board member of one subsidiary.
Group-related companies: Chairman of Fuerst Day Lawson Holdings
Limited (UK) and Director of one subsidiary (UK), Chairman of
Highlander-Partners (Poland) and Director of Sferra Fine Linens Uk
Limited (UK)
Chairman of Troy Homes Limited (UK).
Patron of Children with Speciel Needs Foundation (UK)
Chairman of the Board of Directors of BuVEG
(Bundesverband energieeffiziente Gebäudehülle) (Germany).
Member of the Board of Directors of FIW
(Forschungsinstitut für Wärmtechnik) (Germany).
Member of the Board of Directors of Solix Group AB (Sweden) and of
one subsidiary.
Management’s review | Governance
43 | H+H Annual Report 2022
Miguel Kohlmann Helen MacPhee
Male. Born 1962. German & Brazilian. Female. Born 1962. British.
Professional board member and advisor. Senior Vice President of Finance, AstraZeneca plc (UK).
Joined the Board of Directors in 2018. Member of the
Remuneration Committee and the Nomination Committee.
Joined the Board of Directors in 2019.
Member of the Audit Committee (Chair).
Does not hold any shares in H+H and no changes were made
to his holding during 2022.
Does not hold any shares in H+H and no changes were made
to her holding during 2022.
Independent as defined in the Danish Recommendations on
Corporate Governance.
Independent as defined in the Danish Recommendations on
Corporate Governance.
Extensive management experience in building materials and
industry on a global scale. Worked in controlling, sales, production
and general management.
Extensive experience within strategic and operational finance
and international experience in change mangement, financial
oversight and control, governance, and risk frameworks, as well
as international talent development.
Other management positions and directorships Other management positions and directorships
Chairman of the Board of Directors of Pfleiderer GmbH (Germany),
Archroma Holdings SARL (Luxemborg) and NMC International S.A.
(Luxembourg).
Member of the Advisory Board of Paul Bauder GmBH (Germany).
N/A
Board of Directors Executive Board
Jörg Brinkmann Peter Klovgaard-Jørgensen
Male. Born 1979. German. Male. Born 1978. Danish.
CEO since 2022 CFO since 2019
Does not hold any shares in H+H and no changes were made
to his holding during 2022.
Holds 7,962 shares in H+H with an addition of 4,283 shares in 2022.
Background Background
2018-2022: Managing Director Europe James Hardie Europe 2016-2019: CFO of ISS Denmark A/S (Denmark)
2014-2018: CEO of Fermacell 2014-2016: Head of Finance of ISS Denmark A/S (Denmark)
2011-2014: Sales Director of Fermacell 2010-2014: Treasury Vice President of ISS Group
2005-2011: Marketing at Xella Group
Prior: Auditor of EY
Education Education
MSc (Business Administration)
PhD Economics
MSc (Business Economics and Auditing)
Management’s review | Governance
44 | H+H Annual Report 2022
Risk management
The Board of Directors evaluates
the risk management processes
on a continuous basis to
ensure that the risk profile, risk
processes and risk awareness are
appropriate. Below are the most
material risk conclusions from the
2022 risk assessment.
A full description of the risk management structure can
be found in the Corporate Governance statement for
2022.
Risk position in 2022
Key changes in the risk position in 2022 were driven
by increased inflation, geopolitical instabilities and
interest rate increases which have negatively impacted
customer demand. These macroeconomic changes
have impacted H+H’s market and production risks
through rising input costs, increasing sales prices and
lower visibility of customer demand.
Most material risks in 2022
Market
Risk description and mitigating actions
The increased inflation has mainly impacted input costs
and energy and have to a large extent been countered
by sales price increases. The general change in market
conditions during 2022 combined with general inflation
has led to a reduction in demand for H+H’s products
towards the end of the year, predominantly in Poland
and Germany. Demand is being monitored closely and
capacity adjustments prepared accordingly.
Furthermore, risks also relate to competition and
potential excess production capacity, which may lead
to changes in competitors’ pricing strategies. H+H
has successfully been able to address this through
our market understanding and a structured process
for continuously updating key leading indicators to
anticipate potential impact and execution of mitigation
plans.
H+H closely monitors economic, political and
competition developments in and outside our footprint
and remain committed to passing on cost increases in
order to counter the high inflationary pressure as this
trend is expected to continue into 2023.
In the long term, the European housing market
continues to offer strong underlying growth
opportunities driven by a structural undersupply of
housing, demographic growth and a need for efficient
building materials.
Net risk assessment
Operating in the construction sector, H+H is exposed to
economic developments but believes to have reduced
the risk to an acceptable level through our agile
business model and mitigating actions. During 2022,
H+H has been able to defend margins, earnings and
cash flow in line with long-term financial targets.
Production
Risk description and mitigation actions
Recent years have been characterised by high demand
for our products which puts pressure on utilisation of
our plant network. As the market dynamics are now
changing, H+H anticipates a lower demand in the short
term which will result in lower production output and
overhead recovery being impacted negatively. Our
diversified geographical footprint and strong factory
networks provide a resilient market position to counter
the impact. In addition, H+H has initiated specific
resilience actions to adjust capacity and has prepared
plans for further adjustments if needed.
Also, there are risks related to inflationary pressures,
especially related to raw materials and transport,
and our ability to absorb the pressures through
continuous improvement projects and/or pass them
on to customers. Mitigating actions have been taken to
reduce and manage the cost base where relevant but
are continuously being evaluated and reassessed due
to the dynamic market conditions. Supply and pricing
agreements have been made, where possible.
During 2022, the supply of gas was a key underlying
risk to our production. As a response, H+H prepared our
production sites for usage of oil as an alternative. Where
coal was used, tight stock management was applied to
ensure sufficient supply during the year. During 2022,
high fluctuations in energy prices were seen across
Europe. Our policy to forward hedge gas and electricity
prices mitigated the impact in 2022 and provides some
cost visibility for 2023.
The expectations above are based on the assumptions
of continuous availability of the relevant energy sources
and raw materials but not on escalations of the war in
Ukraine nor further recessionary developments in any
of the Company’s current markets.
Net risk assessment
Considering the mitigation plans, we believe the risk is
medium but acceptable. However, H+H is continuously
focusing on improving mitigating actions as regards to
production and supply risks.
Management’s review | Governance
45 | H+H Annual Report 2022
1
2
5
7
3
4
6
Probability
Net impact after mitigating actions
Less material risks in 2022
Financial
With the new committed financing agreement,
H+H has low finance risk as credit facilities provide
sufficient funding, including strategic growth, long-term
maturities and excess covenant headroom.
Compliance
The risk of lack of compliance with laws and regulations
is considered low.
People
The risk of incidents and fatalities does exist but
considering the mitigating actions taken and and
management's attention, it is our assessment that the
risk is reduced to an acceptable level. Improved HR
processes also contribute to a reduced people risk.
1
Market
2
Production
3
Financial
4
Compliance
5
People
6
IT
7
Sustainability
IT
The IT-related risk impact is considered low given
our relatively low dependency on IT overall. The
likelihood of occurrence is further reduced as the
mitigating actions are continuously updated and
implemented.
Sustainability
Our strategy on sustainability, as described in
the sustainability report, has reduced the risk to
an acceptable level, but an execution risk for the
long-term strategy remains. The strategy relies on
the use of hydrogen which is not yet available on
the market and that suppliers of cement, lime and
transport services reduce their direct emissions in
line with their targets.
Management’s review | Governance
46 | H+H Annual Report 2022
Shareholder information
under the ticker symbol HH.
Share-price development
The H+H International A/S shares started the year at
a price of DKK 230.00 and closed the year at a price of
DKK 102.60, representing a decrease of 55%. At the end
of the year, the total market value of H+H amounted
to DKK 1,845 million. By comparison, the OMX
Copenhagen Mid-Cap index decreased by 13% in 2022
and the Danish KAXCAP index, an index comprising
all stocks trading on the Nasdaq Copenhagen stock
exchange, decreased by 15%.
The highest traded price during 2022 was DKK 236.50
on 3 January and the lowest traded price was DKK
95.10 on 26 September. The average daily volume was
25,638 shares, representing a decrease of 25% relative
to 2022.
Share buy-back programme
On 3 March 2022, H+H initiated a share buy-back
programme of up to DKK 150 million to be executed
over a period of twelve months. The share buy-back
programme was completed on 3 January 2023. A
total of 1,118,800 shares were bought back under the
programme at an aggregate purchase price of DKK 150
million. The programme was carried out in accordance
with the Safe Harbour Regulation.
The share buy-back programme was carried out with
the objective of adjusting the capital structure of H+H,
and it is expected to be proposed at the Annual General
Meeting in 2023 that any shares bought back under
the programme, which are not used to meet obligations
relating to the Company’s share-based incentive
programme, will be proposed cancelled.
Please refer to Company Announcement no. 469 of 3
March 2022 for more information.
Share capital
H+H’s share capital is currently divided into 17,500,000
shares with a nominal value of DKK 10 per share.
All the Group’s shares enjoy the same voting and
dividend rights. At the end of 2022, H+H held a total
of 1,218,731 shares as treasury shares. As previously
communicated, it is expected to be proposed at the
Annual General Meeting in 2023 that any shares bought
back under the share buy-back programme carried out
during 2022, which are not used to meet obligations
relating to the Company’s share-based incentive
programme, will be cancelled.
Geographical distribution of shareholders
Denmark
United Kingdom
United States
Sweden
Other
Share information
Exchange Nasdaq Copenhagen
ISIN code DK0015202451
Ticker symbol HH
No. of shares 17,500,000
Denomination DKK 10 per share
Share capital DKK 175,000,000
Voting rights One vote per share
Composition of shareholders
On 31 December 2022, H+H had more than 5,300
registered shareholders. Major shareholders owning
more than 5% of the share capital and votes were
Arbejdsmarkedets Tillægspension (more than
10.0%), Nordea Funds Ltd. (more than 5.0%) and
Handelsbanken Fonder AB (more than 5.0%). When
excluding major shareholders and certain other related
shareholdings, the free float of H+H’s outstanding
shares is estimated to be around 70%.
The majority of the share capital (71%) is held by
Danish investors. Other key markets are the United
Kingdom, the United States and Sweden, accounting
for 6%, 6% and 6% of the share capital, respectively.
Major shareholders
Arbejdsmarkets Tillægspension, Denmark >10%
Nordea Funds Ltd., Finland >5%
Handelsbanken Fonder AB >5%
71%
6%
6%
6%
11%
Management’s review | Governance
47 | H+H Annual Report 2022
January February March April May June July August September October November December
80
120
160
200
240
280
Annual general meeting
The next annual general meeting will be held on 30
March 2023. The time and place will be announced in
the notice convening the annual general meeting as
published in a company announcement and on the
Group’s website. The notice will be published no earlier
than five weeks and no later than three weeks prior to
the annual general meeting. Documents for use at the
annual general meeting will be made available on the
H+H website, www.HplusH.com, no later than three
weeks before the meeting. Shareholder proposals for
the agenda of the annual general meeting must be
submitted no later than six weeks before the meeting
(i.e., before 15 February 2023).
Unless otherwise stated in the Danish Companies Act
or the Group’s Articles of Association, resolutions on
the amendment of the Articles of Association will be valid
only if carried by at least two-thirds of the votes cast and
of the voting share capital represented at the general
meeting.
Investor Relations
The purpose of H+H’s financial communications and
other investor relations activities is to ensure that
relevant, accurate and timely information is made
available to the stock market to serve as a basis
for regular trading and a fair pricing of H+H shares.
Relevant investor information is available on H+H’s
website, www.HplusH.com/investor-relations.
To ensure that capital market participants, including
current and prospective investors, are able to make
well-informed investment decisions, H+H seeks a
transparent and active dialogue with all financial market
participants, including investors, sell-side analysts,
journalists and the general public via conference
calls, participation in investor meetings and equity
conferences and social media.
H+H is currently covered by four sell-side analysts who
regularly publish equity research reports about the
company. One other financial institution has coverage
2022 relative share-price performance
H+H International A/S
OMXC Mid-Cap Index (re-based)
KAXCAP Index (re-based)
of the H+H share but is currently in a transition
process. A list of analysts covering H+H can be
found on the Group’s investor relations website,
https://www.HplusH.com/analysts-and-share-analyses.
H+H is not normally available for dialogue about
financial matters in the three-week period leading
up to the publication of an interim financial report
or the annual report. Inquiries concerning investor
relations issues should be addressed to the Head
of Investor Relations and Treasury via email to
Shareholder@HplusH.com.
Financial calendar 2023
1 March 2023 2023 Annual Report
30 March 2023 2023 Annual General Meeting
10 May 2023 Q1 2023 Interim Financial Report
17 August 2023 H1 2023 Interim Financial Report
17 November 2023 Q3 2023 Interim Financial Report
Management’s review | Governance
48 | H+H Annual Report 2022
FINANCIAL STATEMENTS
Income statement
Statement of comprehensive income
Balance sheet at 31 December
Cash flow statement
Statement of changes in equity
Notes to the consolidated financial statements
Notes – Financial statements
Notes – Income statement
Notes – Balance sheet
Notes – Supplementary information
Statement by the Executive Board and the Board of Directors
Independent Auditor’s Reports
49 | H+H Annual Report 2022
Financial statements
Group Parent company
Note (DKK million) 2022 2021 2022 2021
3, 11 Revenue 3,604 3,020 - -
4, 11, 17 Cost of goods sold (2,584 ) (2,115 ) - -
Gross profit before special items 1,020 905 - -
4, 11 Sales costs (170 ) (143 ) - -
4, 11 Administrative costs (222 ) (186 ) (72) (64)
5, Other operating income and costs, net 29 15 66 52
EBITDA before special items 657 591 (6) (12)
6, 11 Depreciation and amortisation (202 ) (183 ) (3) (2)
EBIT before special items 455 408 (9) (14)
7 Special items, net (42 ) (31 ) (14) -
EBIT 413 377 (23) (14)
8 Financial income 6 4 143 299
9 Financial expenses (21 ) (25 ) (17) (24)
Profit before tax 398 356 103 261
10 Tax on profit (81 ) (35 ) 5 6
Profit for the year 317 321 108 267
Profit for the year attributable to:
H+H International A/S’ shareholders 303 310 108 267
Non-controlling interest 14 11 - -
Profit for the year 317 321 108 267
12 Earnings per share (EPS-Basic) (DKK) 17.1 17.5
12 Diluted earnings per share (EPS-D) (DKK) 17.0 17.3
Group Parent company
Note (DKK million) 2022 2021 2022 2021
Profit for the year 317 321 108 267
Other comprehensive income:
Items that will not be reclassified subsequently to the income statement:
20 Actuarial losses and gains 18 47 - -
Tax on actuarial losses and gains (1 ) (11 ) - -
Items that may be reclassified subsequently to the income statement:
Foreign exchange adjustments, foreign entities (17 ) 9 - -
(17 ) 9 - -
Other comprehensive income after tax 0 45 - -
Total comprehensive income for the year 317 366 108 267
Income statement Statement of comprehensive income
Financial statements
50 | H+H Annual Report 2022
Group Parent company
Note (DKK million) 2022 2021 2022 2021
Goodwill 419 364 - -
Customer relations 213 261 - -
Other intangible assets 40 35 22 10
13 Intangible assets 672 660 22 10
Land and buildings 767 755 - -
Plant and machinery 652 633 - -
Other equipment, fixtures and fittings 87 92 5 6
Assets under construction 316 227 - -
14 Property, plant and equipment 1,822 1,707 5 6
15 Deferred tax assets 17 17 10 10
16 Equity investments in subsidiaries - - 1,232 1,230
16 Investments in associated companies 1 1 - -
Other receivables 5 5 - -
Receivables from subsidiaries - - 1,236 1,009
Other non-current assets 23 23 2,478 2,249
Total non-current assets 2,517 2,390 2,505 2,265
17 Inventories 523 321 - -
18 Trade receivables 122 146 - -
Group debtors - - 71 72
18 Other receivables 40 37 1 1
Prepayments 12 7 1 1
Cash 536 499 222 338
Current assets 1,233 1,010 295 412
Total assets 3,750 3,400 2,800 2,677
Group Parent company
Note (DKK million) 2022 2021 2022 2021
19 Share capital 175 180 175 180
Translation reserve (155 ) (138 ) - -
Retained earnings 1,822 1,662 1,435 1,487
Equity attributable to H+H International A/S’s shareholders 1,842 1,704 1,610 1,667
Equity attributable to non-controlling interests 96 110 - -
Equity 1,938 1,814 1,610 1,667
20 Pension obligations 23 85 - -
21 Provisions 38 41 - -
15 Deferred tax liabilities 110 137 - -
26 Lease liabilities 81 85 4 1
25 Deferred payments, acquisition of subsidiary 105 - - -
22 Credit institutions 920 743 873 646
Non-current liabilities 1,277 1,091 877 647
22 Credit institutions - - - -
Trade payables 278 251 8 4
26 Lease liabilities 27 21 2 5
Income tax 37 23 1 -
Payables to subsidiaries - - 278 337
25 Deferred payments, acquisition of subsidiary 7 - - -
21 Provisions 9 5 - -
Other payables 177 195 24 17
Current liabilities 535 495 313 363
Total liabilities 1,812 1,586 1,190 1,010
Total equity and liabilities 3,750 3,400 2,800 2,677
Balance sheet at 31 December
Assets Equity and liabilities
Financial statements
51 | H+H Annual Report 2022
Group Parent company
Note (DKK million) 2022 2021 2022 2021
Operating profit (EBIT) 413 377 (23) (14)
8 Financial income, received 6 4 32 19
9 Financial items, paid (20 ) (25 ) (17) (17)
6 Depreciation and amortisation 202 183 3 2
Write downs - 7 - -
Gain on disposal of property, plant and equipment (9 ) (7 ) - -
Other adjustments with non-cash effects 1 7 4 6
Change in inventories (205 ) (18 ) - -
Change in receivables 12 (54 ) 1 (16)
Change in trade payables and other payables 16 83 11 1
Change in provisions and pension contribution (42 ) (29 ) - -
Income tax paid (58 ) ( 74 ) 5 5
Operating activities 316 454 16 (14)
Sale of property, plant and equipment 11 8 - -
Change in borrowings to subsidiares - - (276) (245)
Capital increase in subsidiaries - - (2) -
8 Dividend from subsidiaries - - 102 280
25 Acquisition of enterprises and related deferred payments - (238 ) - -
13, 14 Acquisition of property, plant and equipment and intangible assets (266 ) (197 ) (13) (16)
Investing activities (255 ) (427 ) (189) 19
Free cash flow 61 27 (173) 5
Group Parent company
Note (DKK million) 2022 2021 2022 2021
22 Change in borrowings 177 134 227 74
25 Debt from acquired enterprises - (28 ) - -
Payment of lease liabilities (27 ) (26 ) (2) -
Dividend to non-controlling interests - (10 ) - -
Purchase of treasury shares (169 ) (95 ) (169) (95)
Financing activities (19 ) (25 ) 56 (21)
Cash flow for the year 42 2 (117) (16)
Cash at 1 January 499 481 338 353
25 Cash related to the acquired enterprises - 7 - -
Foreign exchange adjustments of cash (5 ) 9 1 1
Cash at 31 December 536 499 222 338
Cash flow statement
Financial statements
52 | H+H Annual Report 2022
Group
(DKK million)
Share
capital
Translation
reserve
Retained
earnings
H+H share-
holders share
Non-
controlling
interest' share Total
Equity at 1 January 2021 180 (147 ) 1,405 1,438 71 1,509
Profit for the year - - 310 310 11 321
Other comprehensive income:
Foreign exchange adjustments, foreign entities - 9 - 9 - 9
Actuarial gains/losses on pension plans - - 47 47 - 47
Tax on other comprehensive income - - (11 ) (11 ) - (11 )
Net gains recognised directly in equity - 9 36 45 - 45
Total comprehensive income - 9 346 355 11 366
Acquisition of treasury shares - - (95 ) (95 ) - (95 )
Share-based payment - - 6 6 - 6
Non-controlling interests arising from acquisition - - - - 38 38
Dividend to non-controlling interests - - - - (10 ) (10 )
Total changes in equity - 9 257 266 39 305
Equity at 31 December 2021 180 (138 ) 1,662 1,704 110 1,814
Profit for the year - - 303 303 14 317
Other comprehensive income:
Foreign exchange adjustments, foreign entities - (17 ) - (17 ) - (17 )
Actuarial gains/losses on pension plans - - 18 18 - 18
Tax on other comprehensive income - - (1 ) (1 ) - (1 )
Net gains recognised directly in equity - (17 ) 17 0 - 0
Total comprehensive income - (17 ) 320 303 14 317
Acquisition of treasury shares - - (169 ) (169 ) - (169 )
Share-based payment - - 4 4 - 4
Share capital decrease, note 19 (5 ) - 5 - - -
Adjustment to non-controlling interests arising
from acquisition - - - - (22 ) (22 )
Dividend to non-controlling interests - - - - (6 ) (6 )
Total changes in equity (5 ) (17 ) 160 138 (14 ) 124
Equity at 31 December 2022 175 (155 ) 1,822 1,842 96 1,938
Parent company
(DKK million)
Share
capital
Retained
earnings
Proposed
dividend Total
Equity at 1 January 2021 180 1,310 - 1,490
Profit for the year - 267 - 267
Other comprehensive income - - - -
Total comprehensive income - 267 - 267
Acquisition of treasury shares - (96) - (96)
Share-based payment - 6 - 6
Total changes in equity - 177 - 177
Equity at 31 December 2021 180 1,487 - 1,667
Profit for the year - 108 - 108
Other comprehensive income - - - -
Total comprehensive income - 108 - 108
Acquisition of treasury shares - (169) - (169)
Share-based payment - 4 - 4
Share capital decrease, note 19 (5) 5 - -
Total changes in equity (5) (52) - (57)
Equity at 31 December 2022 175 1,435 - 1,610
Statement of changes in equity
Financial statements
53 | H+H Annual Report 2022
Notes - Financial statements
1 General accounting policies 55
2 Significant estimates and judgements 57
Notes - Income statement
3 Segment information 57
4 Staff costs 58
5 Other operating income and costs before special items 60
6 Depreciation and amortisation before special items 60
7 Special items, net 60
8 Financial income 61
9 Financial expenses 61
10 Tax 61
11 Income statement classified by function 63
12 Earnings per share (EPS) 64
Notes - Balance sheet
13 Intangible assets 64
14 Property, plant and equipment 67
15 Deferred tax 69
16 Investments in subsidiaries 70
17 Inventories/cost of goods sold 71
18 Trade and other receivables 72
19 Share capital and treasury shares 73
20 Pension obligations 73
21 Provisions 77
22 Credit institutions 78
Notes - Supplementary information
23 Contingent liabilities 79
24 Auditors’ remuneration 79
25 Business combinations 80
26 Financial instruments and financial risks 81
27 Related parties 84
28 Events after the balance sheet date 84
Notes to the consolidated financial statements
Financial statements
54 | H+H Annual Report 2022
Description of accounting policies
Notes – Financial statements
1 General accounting policies
Financial statements
55 | H+H Annual Report 2022
1 General accounting policies – continued
Notes – Financial statements
Financial statements
56 | H+H Annual Report 2022
Notes – Financial statements
1 General accounting policies – continued
3 Segment information
Financial statements
57 | H+H Annual Report 2022
Notes – Income statement
4 Staff costs
Group Parent company
3 Segment information – continued
Financial statements
58 | H+H Annual Report 2022
Notes – Income statement
4 Staff costs – continued
Financial statements
59 | H+H Annual Report 2022
Notes – Income statement
5 Other operating income and costs before special items
6 Depreciation and amortisation before special items
7 Special items, net
Financial statements
60 | H+H Annual Report 2022
Notes – Income statement
8 Financial income
9 Financial expenses
10 Tax
Financial statements
61 | H+H Annual Report 2022
Notes – Income statement
10 Tax – continued
Financial statements
62 | H+H Annual Report 2022
Notes – Income statement
11 Income statement classified by function
Financial statements
63 | H+H Annual Report 2022
Notes – Income statement
12 Earnings per share (EPS)
13 Intangible assets
Parent company
(DKK million) 2022 2021
Other
intangible
assets
Other
intangible
assets
Total cost at 1 January 10 3
Additions during the year 13 7
Total cost at 31 December 23 10
Total amortisation at 1 January - -
Amortisation for the year (1) -
Total amortisation at 31 December (1) -
Carrying amount at 31 December 22 10
Financial statements
64 | H+H Annual Report 2022
Notes – Balance sheet
13 Intangible assets – continued
Financial statements
65 | H+H Annual Report 2022
Notes – Balance sheet
13 Intangible assets – continued
Financial statements
66 | H+H Annual Report 2022
Notes – Balance sheet
14 Property, plant and equipment
Parent company
(DKK million) 2022 2021
Land and
buildings
Land and
buildings
Total cost at 1 January 10 9
Additions 1 1
Total cost at 31 December 11 10
Total depreciation at 1 January (4) (2)
Depreciations for the year (2) (2)
Total amortisation at 31 December (6) (4)
Carrying amount at 31 December 5 6
Right-of-use assets included as
Additions 1 1
Depreciation 2 2
Carrying amount at 31 December 5 6
Financial statements
67 | H+H Annual Report 2022
Notes – Balance sheet
14 Property, plant and equipment – continued
Financial statements
68 | H+H Annual Report 2022
Notes – Balance sheet
14 Property, plant and equipment – continued
15 Deferred tax
Financial statements
69 | H+H Annual Report 2022
15 Deferred tax – continued
16 Investments in subsidiaries
Parent company
(DKK million) 2022 2021
Acquisition cost at 1 January 1,297 1,297
Additions 2 -
Disposals - -
Cost at 31 December 1,299 1,297
Impairment losses at 1 January (67) (67)
Reversal of previous write-down - -
Reversal in connection with disposals - -
Impairment losses at 31 December (67) (67)
Carrying amount at 31 December 1,232 1,230
The cost of investments in subsidiaries was tested for impairment at the end of 2022. The recoverable amount of the equity investments at
31 December 2022 is based on the value in use, which has been determined using expected net cash flows based on estimates for the years
2023-2028 and a WACC after tax of 8.2%-13.0% (2021: 6.9-10.5%). The weighted average growth rate used for extrapolating expected future
net cash flows for the years after 2028 has been estimated at 2.0% (2021: 2.0%). It is estimated that the growth rate will not exceed the long-
term average growth rate in the respective company’s markets; see note 14 for further information on the impairment tests.
Notes – Balance sheet
Financial statements
70 | H+H Annual Report 2022
16 Investments in subsidiaries – continued
Impairment of financial assets
Loans to related and other parties: Lifetime expected credit losses (ECL) has been provided for them upon initial application of IFRS 9 until
these financial assets are derecognised as it was determined on initial application of IFRS 9 that it would require undue cost and effort to
determine whether their credit risk has increased significantly since initial recognition to the date of initial application of IFRS 9.
In determining the expected credit losses for these assets, we have taken into account the historical default experience, the financial position
of the counterparties and considering various external sources of actual and forecast economic information, as appropriate, in estimating the
probability of default of each of these financial assets occurring within their respective loss assessment time horizon, as well as the loss upon
default in each case.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the
loss allowance for these financial assets. Loans to subsidiaries are denominated in EUR and therefor not exposed to foreign exchange risks.
Accounting policies
Equity investments in subsidiaries in the parent company’s financial statements: Equity investments in subsidiaries are measured at cost. If
there is any indication of impairment or reversal of prior year’s impairment, an impairment test is carried out as described in note 13. Cost is
written down to the recoverable amount whenever the carrying amount is higher.
Notes – Balance sheet
17 Inventories/cost of goods sold
Financial statements
71 | H+H Annual Report 2022
Notes – Balance sheet
18 Trade and other receivables
Financial statements
72 | H+H Annual Report 2022
Notes – Balance sheet
19 Share capital and treasury shares
20 Pension obligations
Financial statements
73 | H+H Annual Report 2022
Notes – Balance sheet
20 Pension obligations – continued
Financial statements
74 | H+H Annual Report 2022
Notes – Balance sheet
20 Pension obligations – continued
Financial statements
75 | H+H Annual Report 2022
Notes – Balance sheet
20 Pension obligations – continued
Financial statements
76 | H+H Annual Report 2022
Notes – Balance sheet
21 Provisions
Financial statements
77 | H+H Annual Report 2022
Notes – Balance sheet
22 Credit institutions
Financial statements
78 | H+H Annual Report 2022
Notes – Supplementary information
23 Contingent liabilities
24 Auditors’ remuneration
Financial statements
79 | H+H Annual Report 2022
Notes – Supplementary information
25 Business combinations
Financial statements
80 | H+H Annual Report 2022
Notes – Supplementary information
26 Financial instruments and financial risks
25 Business combinations – continued
Financial statements
81 | H+H Annual Report 2022
Notes – Supplementary information
26 Financial instruments and financial risks – continued
Parent company’s monetary items and sensitivity
(DKK million) 2022 2021
Position Sensitivity Position Sensitivity
Cash and
receivables
Potential
volatility of
exchange
rate
Hypothetical
impact on
profit before
tax for the
year*
Hypothetical
impact on
equity
Cash and
receivables
Potential
volatility of
exchange
rate
Hypothetical
impact on
profit before
tax for the
year*
Hypothetical
impact on
equity
EUR/DKK 1,002 1% 10 8 1,028 1% 10 8
GBP/DKK (140) 5% (7) (5) (147) 5% (7) (6)
3 3 3 2
* The hypothetical impact on profit/loss and equity is significant to the parent company’s financial statements but not necessarily to the consolidated financial statements.
The parent company has significant monetary items in currencies other than the functional currency in the form of loans to subsidiaries. The
table above shows the parent company’s key monetary positions broken down by currency and derived sensitivity.
Financial statements
82 | H+H Annual Report 2022
Notes – Supplementary information
26 Financial instruments and financial risks – continued
Financial statements
83 | H+H Annual Report 2022
Notes – Supplementary information
26 Financial instruments and financial risks – continued
27 Related parties
Parent Company
A management fee totaling DKK 66 million (2021: DKK 52 million) was received by the parent Company from the remainder of the Group.
Transactions between the parent company and subsidiaries also include deposits, loans and interest; these are shown in the parent company
balance sheet and notes 8 and 9.
There were no material unsettled balances with related parties at the end of the year.
Trading with related parties is at arm’s length.
28 Events after the balance sheet date
Financial statements
84 | H+H Annual Report 2022
Statement by the Executive Board and the Board of Directors
Executive Board
Board of Directors
Financial statements
85 | H+H Annual Report 2022
Independent Auditor’s Reports
Report on the audit of the Financial Statements
Our opinion
Financial statements
86 | H+H Annual Report 2022
Financial statements
87 | H+H Annual Report 2022
Financial statements
88 | H+H Annual Report 2022
CVR no 33 7 7 12 31
Financial statements
89 | H+H Annual Report 2022
Contact information
Group Head Office
Telephone: +45 35 27 02 00
E-mail: inf[email protected]
www.HplusH.com
Company Reg. No.: 49 61 98 12
H+H Benelux B.V.
Nikkelstraat 4
6031 TR Nederweert
Netherlands
Tel.: +31 49 54 50 169
www.HplusH.nl
H+H Denmark
Skanderborgvej 234
8260 Viby J
Denmark
Tel.: +45 70 24 00 50
www.HplusH.dk
H+H Germany
Klaus-Bungert-Straße 6a
40468 Düsseldorf
Germany
Tel.: +49 45 54 70 00
www.HplusH.de
H+H Sweden
Mobilvägen 3
246 43 Löddeköpinge
Sweden
Tel.: +46 40 55 23 00
www.HplusH.se
H+H Czech Republic
Beroun-Meˇsto 660
26601 Beroun
Czech Republic
Tel.: +420 311 644 705
www.VAPIS-sh.cz
H+H Switzerland
Aarauerstrasse 75
5200 Brugg
Switzerland
Tel.: +41 56 46 05 466
www.hunziker-kalksandstein.ch
H+H UK
Celcon House, Ightham
Sevenoaks, Kent TN15 9HZ
UK
Tel.: +44 17 32 88 63 33
www.HplusH.co.uk
H+H Poland
ul.Kupiecka 6
03-046 Warsaw
Poland
Tel.: +48 22 51 84 000
www.HplusH.pl
90 | H+H Annual Report 2022
1909
Henriksen &
W. Kähler established
joint gravel pit
enterprise
1937
Business
expanded with
Danish Aircrete
and Rockwool
Partnership
2011
Michael T. Andersen is
appointed CEO of H+H
2022
Jörg Brinkmann
is appointed CEO
2000
Focus on
aircrete—expansion to
Finland and Germany
2019
Divestment of the
Russian business
and acquisition of
one CSU factory in
Germany
1958
H+H enters the
UK—joint venture
with Celcon
1962
Henriksen & W. Kähler
divided Rockwool
activities from the
other activities
2009
Opening of factory
near St. Petersburg,
Russia
1985
H+H’s B shares listed
on the Copenhagen
Stock Exchange
2017
H+H enters the CSU
markets through
acquisitions in
Germany, Switzerland
and Poland
2019
Peter Klovgaard-
Jørgensen is
appointed CFO
2005
Expansion into
Poland
2015
Restructuring of the
Polish aircrete market
2021
Acquisitions of
one AAC factory
and one
combined AAC
and CSU factory
in Germany
2013
Kent Arentoft is
appointed
Chairperson of the
Board of Directors
H+H as a
conglomerate
190 9–1998
H+H as a
consolidator
199 8–202 1
H+H as a Partner
in Wall Building
2022
Turnaround
2011–2015
Restructuring
of the European
white-stone
markets
2015–2021
2020
Acquisition of one
AAC factory in
Germany
More than 100 years
of experience
91 | H+H Annual Report 2022
Design and production: Noted
Telephone: +45 35 27 02 00
Email: info@HplusH. com