XCSE:HH ESEF Annual Report
H+H INTERNATIONAL A/S (XCSE:HH)
ESEF Annual Report
2022-08-30
For: 2022-06-30
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H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 1/20
Telephone +45 35 27 02 00
CVR No. 49 61 98 12
LEI: 3800GJODT6FV8QM841
Date:
18 August 2022
Today, the Board of Directors of H+H International A/S (hereinafter referred to as “H+H” or “the Company”) has
adopted the Interim Financial Report for the second quarter (“Q2 2022”) and the first six months of 2022 (“H1
2022”).
CHIEF EXECUTIVE OFFICER MICHAEL T. ANDERSEN QUOTE
“This was an exceptionally strong quarter for H+H fuelled by continued high activity and customer demand. I am
pleased with the solid performance across the business in the first half of 2022, which demonstrates our continued
ability to negotiate sales price increases with customers to offset the continued inflationary pressure. While the
current macroeconomic landscape is clearly causing uncertainties and is expected to weigh on future construction
activity, we maintain our financial expectations for the full year. Our focus will remain on delivering strong
operational performance and continuing to service customers across our footprint.”
PERFORMANCE HIGHLIGHTS FOR Q2 2022 (Q2 2021)
• Revenue increased by 20% to DKK 1,000 million (DKK 836 million).
• Revenue growth before acquisitions and divestments measured in local currencies (“organic growth”) was 13%
(39%).
• Gross profit was DKK 320 million (DKK 251 million), corresponding to a gross margin of 32% (30%).
• EBIT before special items
1
was DKK 177 million (DKK 125 million), corresponding to an EBIT margin before
special items of 18% (15%).
• Net profit of DKK 129 million (DKK 93 million).
• Free cash flow was DKK 165 million (DKK 172 million).
• Financial gearing was 0.5 times EBITDA at the end of Q2 2022 (0.3 times EBITDA at the end of Q2 2021).
1
No special items were recognised in the period from 1 April 2021 to 30 June 2021
Company Announcement No. 502, 2022
H1 2022 Interim Financial Report: strong activity and sales price increases drove solid
earnings in high-inflation environment
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 2/20
Interim financial report
H1 2022
FINANCIAL HIGHLIGHTS FOR THE PERIOD 1 JANUARY 2022 TO 30 JUNE 2022
DKK million
Q2 2022
Q2 2021
H1 2022
H1 2021
Sales volume (thousand cubic metres)
1,182
1,192
2,269
2,152
Revenue
1,000
836
1,874
1,478
Organic growth
13%
39%
20%
14%
Gross margin before special items
32%
30%
30%
30%
EBITDA before special items
227
172
386
281
EBIT before special items
177
125
287
189
EBIT margin before special items
18%
15%
15%
13%
Special items
(9)
-
(19)
-
Return on Invested Capital (ROIC)
26%
21%
26%
21%
NIBD/EBITDA before special items ratio
0.5x
0.3x
0.5x
0.3x
Free cash flow
165
172
102
140
FINANCIAL OUTLOOK FOR 2022
The financial outlook for the full year 2022 is maintained:
• Revenue growth before acquisitions and divestments measured in local currencies ("organic growth") is
expected to be in the range of 15% to 20%.
• EBIT before special items is expected to be in the range of DKK 440 million to DKK 520 million.
The financial outlook for 2022 is based on the following specific assumptions:
• Exchange rates, primarily the British pound ("GBP"), the euro ("EUR") and the Polish zloty ("PLN"), are expected
to remain at mid-August 2022 levels.
• Costs of energy costs and raw materials are expected to remain at current levels.
H1 2022 INTERIM FINANCIAL REPORT CONFERENCE CALL
In connection with the release of the H1 2022 Interim Financial Report, a conference call for investors and analysts
is scheduled for Friday 19 August 2022, at 10:00 a.m. CEST. On the call, Chief Executive Officer (“CEO”) Michael T.
Andersen and Chief Financial Officer (“CFO”) Peter Klovgaard-Jørgensen will present the interim financial report.
The presentation will be followed by a Q&A session. Investors and analysts are invited to participate via phone
(PIN code: 275042):
DK: +45 78768490
UK: +44 2037696819
US: +1 6467870157
• Other participants can follow the conference call via live webcast here.
• The presentation slides for the conference call will be made available beforehand here.
• A replay of the conference call will be available afterwards on H+H’s Investor Relations website here.
H+H’s core activity is the manufacture and sale of wall-building materials with a revenue in 2021 of DKK 3.0 billion. The main
product lines are aircrete blocks and calcium silicate units used for the residential new building segment. H+H has 31 factories in
Northern and Central Europe with a total output of close to 4.5 million cubic metres of products annually and has a leading
position in most of its markets. H+H has more than 1,600 employees and is listed on the Nasdaq Copenhagen stock exchange.
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 3/20
Interim financial report
H1 2022
KEY FIGURES – H+H GROUP
Financial ratios have been calculated in accordance with recommendations from the Danish Society of Financial Analysts.
* Invested capital is measured on a rolling twelve-months basis.
** Investments in property, plant and equipment exclude effects from IFRS 16.
Q2 Q2 H1 H1 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Income statement
Revenue 1,000 836 1,874 1,478 3,020
Gross profit before special items 320 251 564 439 905
EBITDA before special items 227 172 386 281 591
EBITDA 218 172 367 281 567
EBIT before special items 177 125 287 189 408
EBIT 168 125 268 189 377
Profit before tax 164 120 259 179 356
Profit for the period 129 93 201 142 321
Balance sheet
Assets 3,673 3,186 3,673 3,186 3,400
Invested capital* 1,983 1,839 1,983 1,839 1,852
Investments in property, plant and equipment** 42 34 84 61 197
Acquisition and divestment of enterprises - - - - 238
Net working capital 178 82 178 82 65
Equity 1,859 1,644 1,859 1,644 1,814
Net Interest-bearing debt (NIBD) 343 149 343 149 350
Cash flow
Cash flow from operating activities 207 206 186 201 454
Cash flow from investing activities (42) (34) (84) (61) (427)
Cash flow from financing activities (70) (16) (70) 30 (25)
Free cash flow 165 172 102 140 27
Financial ratios
Organic growth 13% 39% 20% 14% 13%
Gross margin before special items 32% 30% 30% 30% 30%
EBITDA margin before special items 23% 21% 21% 19% 20%
EBITDA margin 22% 21% 20% 19% 19%
EBIT margin before special items 18% 15% 15% 13% 14%
EBIT margin 17% 15% 14% 13% 12%
Return on invested capital (ROIC) (excl. Goodwill) 26% 21% 26% 21% 20%
Solvency ratio 48% 50% 48% 50% 50%
NIBD/EBITDA before special items ratio 0.5x 0.3x 0.5x 0.3x 0.6x
Share data
Share price, end of period (DKK) 133 192 133 192 230
Book value per share, end of period (DKK) 106 92 106 92 102
Earnings per share 7.4 5.2 11.3 7.9 17.5
Diluted earnings per share 7.4 5.2 11.3 7.9 17.5
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 4/20
Interim financial report
H1 2022
MANAGEMENT’S REVIEW
INCOME STATEMENT FOR THE SECOND QUARTER
OF 2022
Revenue
Total revenue increased by 20% to DKK 1,000 million
in Q2 2022 compared to DKK 836 million in Q2 2021.
Revenue growth before acquisitions and divestments
measured in local currencies (“organic growth”) was
13% in Q2 2022 compared to 39% in Q2 2021.
The relatively higher organic growth was driven by
the continued implementation of sales price
increases to counter the continued high inflationary
pressure, partly offset by lower sales volumes for the
quarter as a result of lower production output
primarily due to the planned upgrade of the
Wittenborn factory in Germany.
Revenue in the Central Western Europe region
increased by 9% to DKK 440 million compared to DKK
403 million in Q2 2021 driven by revenue from
acquisitions. Organic growth in the region was
negative 4% as a result of lower sales volumes for
AAC, and to a lesser extend for CSU, partly offset by
higher sales prices for both product categories.
Revenue in the United Kingdom increased by 13% to
DKK 281 million compared to DKK 248 million in Q2
2022. Organic growth in the United Kingdom was
11%, mainly driven by higher sales prices.
Revenue in Poland increased by 51% to DKK 279
million compared to DKK 185 million in Q2 2021.
Organic growth was 54%, primarily driven by higher
sales prices and, to a lesser extent, higher sales
volumes in both product categories.
Of the total revenue in Q2 2022 of DKK 1,000 million,
AAC and CSU constituted 71% and 29%, respectively.
Production cost
Production cost remains impacted by increasing
prices for raw materials as well as higher transport
prices in the UK from a continued high demand
pressure.
H+H has during the second quarter of 2022
continued the planned upgrades and maintenance of
the German factories in Feuchtwangen and
Wittenborn, respectively, resulting in relatively
lower production output in the period.
Gross profit
Gross profit amounted to DKK 320 million compared
to DKK 251 million in Q2 2021, corresponding to
gross margins of 32% and 30%, respectively.
Gross profit in the AAC and CSU businesses
amounted to DKK 220 million and DKK 100 million in
Q2 2022, respectively. This corresponded to gross
margins of 31% and 34% for AAC and CSU,
respectively.
EBITDA before special items
EBITDA before special items amounted to DKK 227
million compared to DKK 172 million in Q2 2021,
corresponding to EBITDA margins of 23% and 21%,
respectively.
Depreciation and amortisation
Depreciation and amortisation in Q2 2022 amounted
to DKK 50 million compared to DKK 47 million in Q2
2021. The increase related to companies acquired in
2021.
EBIT before special items
EBIT before special items amounted to DKK 177
million in Q2 2022, compared to DKK 125 million in
Q2 2021, corresponding to EBIT margins before
special items of 18% and 15%, respectively.
Special items
Special items of DKK 9 million for Q2 2022 comprise
of additional transport cost as a result of an ongoing
factory upgrade in Germany.
Net financials
Net financials totalled an expense of DKK 4 million in
Q2 2022, compared to an expense of DKK 5 million in
Q2 2021.
Profit before tax
Profit before tax amounted to DKK 164 million in Q2
2022, compared to DKK 120 million in Q2 2021.
Tax
Tax for the period amounted to a net expense of
DKK 35 million compared to a net expense of DKK 27
million in Q2 2021. Please refer to Note 13 for more
information about tax for the period.
Revenue, external
Amounts in DKK million 2022 2021 2022 2021
Central Western Europe 440 403 836 695
United Kingdom 281 248 520 444
Poland 279 185 518 339
Total 1,000 836 1,874 1,478
Q2
H1
Revenue
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 5/20
Interim financial report
H1 2022
Net profit
Net profit for the period amounted to DKK 129
million compared to DKK 93 million in Q2 2021.
Profit for the period is attributable to H+H
International A/S’ shareholders by DKK 129 million
and to non-controlling interests by DKK 0 million
compared to DKK 93 million and DKK 0 million,
respectively, for Q2 2021.
Comprehensive income
Other comprehensive income for Q2 2022 totalled a
loss of DKK 8 million compared to an income of DKK
30 million in Q2 2021. The year-on-year decrease
was mainly driven by unfavourable foreign exchange
rates.
INCOME STATEMENT FOR THE FIRST SIX MONTHS
OF 2022
Revenue
Total revenue for the first six months of 2022
increased by 27% to DKK 1,874 million compared to
DKK 1,478 million in the first half of 2021. Organic
growth was 20% in the first six months of 2022
compared to 14% for the first half of 2021.
Of the total revenue of DKK 1,874 million, AAC and
CSU constituted 71% and 29%, respectively.
Gross profit
Gross profit in the first half 2022 increased by 28% to
DKK 564 million compared to DKK 439 million in
2021, corresponding to gross margins of 30% and
30%, respectively.
Gross profit in the AAC and CSU businesses
amounted to DKK 399 million and DKK 165 million,
respectively. This compares to DKK 331 million and
DKK 108 million in the first half of 2021 for the AAC
and CSU businesses, respectively.
EBITDA before special items
EBITDA before special items in the first six months of
2022 increased by 37% to DKK 386 million compared
to DKK 281 million in 2021, corresponding to EBITDA
margins of 21% and 19%, respectively.
Depreciation and amortisation
Depreciation and amortisation in the first half 2022
amounted to DKK 99 million compared to DKK 92
million in first half 2021. The increase relates to
companies acquired in 2021.
EBIT before special items
EBIT for the first six months of 2022 increased by
52% to DKK 287 million compared to DKK 189 million
in 2021, corresponding to EBIT margins of 15% and
13%, respectively.
Special items
Special items for the first half of 2022 comprise
restructuring costs of DKK 19 million, comprising
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
Management.
Net financials
Net financials totalled an expense of DKK 9 million in
first half 2022, compared to an expense of DKK 10
million in first half 2021.
Profit before tax
Profit before tax for the first half 2022 amounted to
DKK 259 million, compared to DKK 179 million in first
half 2021.
Tax
Tax for the period amounted to a net expense of
DKK 58 million compared to a net expense of DKK 37
million in first half 2021. Please refer to Note 13 for
more information about tax for the period.
Net profit
Profit in the first six months of 2022 increased by
42% to DKK 201 million, compared to DKK 142
million in 2021.
Profit for the period is attributable to H+H
International A/S’ shareholders by DKK 197 million
and to non-controlling interest by DKK 4 million
compared to DKK 142 million and DKK 0 million,
respectively, for the first half of 2021.
Comprehensive income
Other comprehensive income for the first six months
of 2022 was negative DKK 51 million compared to
positive DKK 37 million in 2021, mainly driven by
changes in actuarial losses net of deferred tax of DKK
63 million related to pension obligations as well as
foreign exchange adjustments of DKK 25 million.
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 6/20
Interim financial report
H1 2022
CASH FLOW
Operating activities
Cash flow from operating activities amounted to DKK
207 million in Q2 2022 compared to DKK 206 million
in Q2 2021. This was mainly driven by relatively
higher earnings for the quarter and changes in
working capital.
Cash flow from operating activities in the first six
months of 2022 was DKK 186 million against DKK 201
million in 2021 as the relatively higher earnings for
the period were more than offset by a negative
working capital development driven by an increased
level of trade debtors as result of the relatively high
market activity.
Investing activities
Cash flow from investing activities in Q2 2022
amounted to negative DKK 42 million compared to
negative DKK 34 million in Q2 2021.
Cash flow from investing activities in first six months
of 2022 was negative DKK 84 million, compared to
negative DKK 61 million in the first half of 2021.
Financing activities
Cash flow from financing activities amounted to
negative DKK 70 million in first half of 2022
compared to positive DKK 30 million in 2021. The
year-on-year decrease was mainly driven by a
change in borrowings of negative DKK 59 million and
the purchase of treasury shares of DKK 50 million in
connection with the ongoing share buy-back
programme.
BALANCE SHEET
On 30 June 2022, the balance sheet total amounted
to DKK 3,673 million compared to DKK 3,186 million
on 30 June 2021.
Net interest-bearing debt
Net interest-bearing debt totalled DKK 343 million
on 30 June 2022 corresponding to a decrease of DKK
7 million since 31 December 2021.
The decrease in net interest-bearing debt since the
beginning of the year was primary driven by earnings
for the period, partly offset by capital expenditures,
and the purchase of treasury shares.
On 30 June 2022, the Company’s financial gearing
was 0.5 times net interest-bearing debt to EBITDA,
which remains comfortably below the Company’s
long-term financial target of 1-2x EBITDA.
The Company’s net interest-bearing debt excluding
leasing totalled DKK 245 million on 30 June 2022,
corresponding to an unused committed bank facility
of DKK 0.8 billion.
Equity
The consolidated equity increased by DKK 45 million
compared to 31 December 2021 and increased by
DKK 215 million compared to 30 June 2021.
CURRENT MARKET ENVIRONMENT
The European housing market is still expected to
grow, supported by a structural undersupply of
housing, demographic growth, and urbanisation.
The high activity levels seen in the beginning of the
year continued into the second quarter, but growing
inflation, geopolitical instabilities and continued
interest rate increases continue to weigh on visibility
for the second half of the year as a continuation of
such trends may adversely impact future customer
demand.
In Germany, demand remains high, fuelled by a
continued shortage of housing space—especially in
the larger cities—from a growing number of smaller
households.
186
93
85
CF operating
activities
Purchase
of treasury
shares
343
NIBD
31/12 21
CAPEX, excl.
IFRS 16
CF investing
activities
FX and
other
9
Sale of
assets
8
IFRS 16
Impact
2
NIBD
30/6 22
350
Equity
H1 H1
Amounts in DKK million 2022 2021
1 January 1,814 1,509
Profit for the period 201 142
Actuarial gains on pension plans (36) 27
Foreign exchange adjustments (15) 10
Dividend to non-controlling
interests
- (10)
Purchase of treasury shares (85) (36)
Adjustment to non-controlling
interests arising from acquisition
(22) -
Other adjustments 2 2
30 June 1,859 1,644
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 7/20
Interim financial report
H1 2022
However, the country faces growing inflation rates,
in large part due to rising natural gas prices driven by
uncertainties around future supply. This has
hampered visibility for the remainder of the year, as
consumers likely re-evaluate investment decisions
based on the relatively higher cost of living and
general economic uncertainties.
As a result thereof, the number of building permits
issued has declined by 11% year-on-year. Further,
the rising inflation is driving an increasing trend of
postponements of construction starts.
While H+H continues to assume that there will be
sufficient gas supplies available for the second half
of the year, the Company has taken precautionary
measures to ensure the continuous availability of
energy to safeguard production in the exceptional
event of limited availability of natural gas.
Currently, the majority of the factories in the Central
Western Europe region have the capability to use oil
as an alternative energy source if necessary.
Potential uncertainties therefore relate to a limited
share of H+H’s production volume in the region.
While H+H has taken certain measures to safeguard
its own production in the extraordinary event of
limited availability of natural gas, major
uncertainties still relate to the Company’s supply
chains and the continuous availability of relevant
raw materials.
The upgrade of the Wittenborn factory continues as
planned with support from the Feuchtwangen and
the Domapor factories. Further, the integration of
the Domapor factory into the wider German factory
network continues in line with plans.
In the Nordics, the latest economic analyses point to
a relatively more negative outlook for the
construction industry due to high inflation and a
shortage of labour and materials. However, current
activity levels remain high, and the largest
housebuilders are reporting strong forward sales for
the remainder of 2022.
In both Switzerland and the Benelux countries,
uncertainties from current geopolitical events
continue to weigh on the expected economic growth
for 2022.
In the United Kingdom (“UK”), the construction
industry is still expected to continue growing, albeit
at slower rates than previously expected. The
downward revision comes as a result of growing
inflation arising from both local and global issues.
In the private housing segment, demand remains
strong and resilient, but in combination with the
growing inflation, rising interest rates are expected
to adversely impact consumer confidence in the
country. Nevertheless, housing sales rates remain
high, and housebuilders continue to report strong
forward sales for the remainder of the year.
The general expectation is therefore that the UK
housing market will continue to provide favourable
market conditions in the short term, but increased
levels of uncertainty fuel the anticipation of tougher
conditions in the medium term.
In Poland, demand remained solid in the second
quarter and supported the implementation of
significant sales price increases to counter the
growing inflation on raw materials.
The number of building permits issued over the
January to June period remains at a high level, and
housing completions are continuing along an upward
trend. However, growing inflation and rising interest
rates have adversely impacted Polish purchasing
power. This will likely influence investment decisions
in the country and construction starts have already
decreased by approximately 17% compared to the
corresponding period in 2021.
It remains unclear to which extent the great number
of 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.
The expansion of the Company’s AAC factory in Reda
with one additional CSU production line is continuing
as planned. H+H expects that production will
commence in September 2022.
H+H’s diversified geographical footprint and strong
factory networks provide a resilient market position.
For the second half of the year, H+H expects
continued positive market developments with a
gradual stabilisation of demand levels.
These expectations are based on the assumptions of
continuous availability of relevant energy sources
and raw materials and neither escalations of the war
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 8/20
Interim financial report
H1 2022
in Ukraine nor recessionary developments in any of
the Company’s current markets.
MOST MATERIAL RISKS AND
UNCERTAINTIES
For most material risk and uncertainties, please refer
to Note 6 “Significant accounting estimates and
judgements” and to Note 13 “Risks Management”.
EVENTS IN THE SECOND QUARTER OF 2022
At the annual general meeting held 31 March 2022,
a reduction of the share capital by a nominal amount
of DKK 4,833,650 was approved. The share capital
decrease was registered with the Danish Business
Authorities on 5 May 2022.
EVENTS AFTER THE BALANCE SHEET DATE
No events have occurred after the balance sheet
date that will have a material effect on the parent
company’s or the H+H Company’s financial position.
FINANCIAL OUTLOOK FOR 2022
The Company’s financial expectations for the full
year 2022 are maintained:
• Revenue growth before acquisitions and
divestments measured in local currencies
(“organic growth”) is expected to be in the range
of 15% to 20%.
• EBIT before special items is expected to be in the
range of DKK 440 million to DKK 520 million.
ASSUMPTIONS FOR THE FINANCIAL OUTLOOK FOR
2022
Specific assumptions
The expectations for H+H’s financial performance in
2022 are based on certain specific and general
assumptions. Management believes that the most
significant of these assumptions relate to the
following items:
• Exchange rates, primarily the British pound
(“GBP”), the euro (“EUR”) and the Polish zloty
(“PLN”), are expected to remain at mid-August
2022 levels.
• Costs of energy and raw materials are expected
to remain at current levels.
General assumptions
The expectations for H+H’s financial performance
are also based on certain 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;
• macro-economic and geopolitical developments;
and
• operational uptime at H+H’s production plants,
including the supply of relevant energy and raw
materials.
FINANCIAL CALENDAR 2022
Q3 2022 Interim Financial Report
10 Nov. 2022
FORWARD-LOOKING STATEMENTS
The Interim Financial Report contains forward-
looking statements. Such statements are subject to
risks and uncertainties, as various factors, many of
which are beyond the control of H+H, may cause
actual developments and results to differ materially
from the expectations expressed in this document.
In no event shall H+H be liable for any direct,
indirect, or consequential damages or any other
damages whatsoever resulting from loss of use,
data, or profits, whether in an action of contract,
negligence, or other action arising out of or in
connection with the use of information in this
document.
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 9/20
Interim financial report
H1 2022
STATEMENT BY THE EXECUTIVE BOARD AND THE BOARD OF DIRECTORS
EXECUTIVE BOARD
BOARD OF DIRECTORS
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 10/20
Interim financial report
H1 2022
CONDENSED INCOME STATEMENT
Q2 Q2 H1 H1 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Revenue 1,000 836 1,874 1,478 3,020
Cost of goods sold (680 ) (585 ) (1,310 ) (1,039 ) (2,115 )
Gross profit before special items 320 251 564 439 905
Sales costs (46 ) (36 ) (84 ) (72 ) (143 )
Administrative costs (55 ) (43 ) (104 ) (89 ) (186 )
Other operating income and costs, net 8 0 10 3 15
EBITDA before special items 227 172 386 281 591
Depreciation and amortisation (50 ) (47 ) (99 ) (92 ) (183 )
EBIT before special items 177 125 287 189 408
Special items, net (9 ) - (19 ) - (31 )
EBIT 168 125 268 189 377
Financial income 1 0 2 1 4
Financial expenses (5 ) (5 ) (11 ) (11 ) (25 )
Profit before tax 164 120 259 179 356
Tax on profit (35 ) (27 ) (58 ) (37 ) (35 )
Profit for the period 129 93 201 142 321
Profit for the period attributable to:
H+H International A/S' shareholders 129 93 197 142 310
Non-controlling interest 0 0 4 0 11
Profit for the period 129 93 201 142 321
Earnings per share (EPS-Basic) 7.4 5.2 11.3 7.9 17.5
Diluted earnings per share (EPS-D) 7.4 5.2 11.3 7.9 17.5
Group
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 11/20
Interim financial report
H1 2022
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Q2 Q2 H1 H1 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Profit for the period 129 93 201 142 321
Items that may be reclassified subsequently to profit or loss:
Foreign exchange adjustments, foreign entities (7 ) 16 (15 ) 10 9
(7 ) 16 (15 ) 10 9
Items that will not be reclassified subsequently to profit:
Actuarial gains and losses 1 16 (40 ) 33 47
Tax on actuarial gains and losses (2 ) (2 ) 4 (6 ) (11 )
(1 ) 14 (36 ) 27 36
Other comprehensive income after tax (8 ) 30 (51 ) 37 45
Total comprehensive income for the period 121 123 150 179 366
Group
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 12/20
Interim financial report
H1 2022
CONDENSED BALANCE SHEET
Group
30 June 31 Dec. 30 June
Amounts in DKK million 2022 2021 2021
ASSETS
Non-current assets
Goodwill 453 364 211
Other intangible assets 265 296 248
Property, plant and equipment 1,727 1,707 1,552
Deferred tax assets 14 17 13
Financial assets 6 6 7
Total non-current assets 2,465 2,390 2,031
Current assets
Inventories 365 321 247
Receivables 317 190 251
Cash 526 499 657
Total current assets 1,208 1,010 1,155
TOTAL ASSETS 3,673 3,400 3,186
EQUITY AND LIABILITIES
Equity
Share capital 175 180 180
Retained earnings 1,745 1,662 1,540
Other reserves (153 ) (138 ) (137 )
Equity attributable to H+H International A/S’ shareholders 1,767 1,704 1,583
Equity attributable to non-controlling interests 92 110 61
Total equity 1,859 1,814 1,644
Non-current liabilities
Pension obligations 101 85 112
Provisions 41 41 32
Deferred tax liability 125 137 135
Credit institutions 771 743 696
Deferred payments, acquisition of subsidiary 105 - -
Lease liabilities 78 85 90
Total non-current liabilities 1,221 1,091 1,065
Current liabilities
Lease liabilities 20 21 20
Trade payables 300 251 241
Income tax 57 23 35
Deferred payment, acquisition of subsidiary 7 - -
Provisions 5 5 6
Other payables 204 195 175
Total current liabilities 593 495 477
Total liabilities 1,814 1,586 1,542
TOTAL EQUITY AND LIABILITIES 3,673 3,400 3,186
Net interest-bearing debt 343 350 149
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 13/20
Interim financial report
H1 2022
CONDENSED CASH FLOW STATEMENT
Q2 Q2 H1 H1
Amounts in DKK million 2022 2021 2022 2021
Operating profit (EBIT)
Financial income, received
Financial expenses, paid
(5 ) (5 ) (11 ) (11 )
Depreciation and amortisation
Gain and losses on sale of assets and other non-cash effects
(8 ) 0 (7 ) -
Change in working capital
Change in provisions and pension contribution
(9 ) (8 ) (27 ) (14 )
Income tax paid
(12 ) (16 ) (27 ) (27 )
Operating activities 207 206 186 201
Acquisition of property, plant and equipment and intangible assets (42 ) (34 ) (84 ) (61 )
Investing activities (42 ) (34 ) (84 ) (61 )
Change in borrowings (14 ) 21 28 87
Change in lease liabilities (6 ) (7 ) (13 ) (14 )
Purchase of treasury shares (50 ) (23 ) (85 ) (36 )
Dividend to non controlling interets - (7 ) - (7 )
Financing activities (70 ) (16 ) (70 ) 30
Total cash flow for the period 95 156 32 170
Cash and cash equivalents, opening 433 497 499 481
Foreign exchange adjustments of cash (2 ) 4 (5 ) 6
Cash and cash equivalents at 30 June 526 657 526 657
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 14/20
Interim financial report
H1 2022
CONDENSED STATEMENT OF CHANGES IN EQUITY
Amounts in DKK million
Share
capital
Translation
reserve
Retained
earnings
H+H
shareholders
share
Non con-
trolling
interests’
share
Total
Equity at 1 January 2022 180 (138 ) 1,662 1,704 110 1,814
Total changes in equity
Profit for the period - - 197 197 4 201
Other comprehensive income - (15 ) (36 ) (51 ) - (51 )
Total comprehensive income - (15 ) 161 146 4 150
Share-based payment - - 2 2 - 2
Purchase of treasury shares - - (85 ) (85 ) - (85 )
Share capital decrease, note 16 (5 ) - 5 - - -
Adjustment to non-controlling interests arising
from acquisition
Total changes in equity in 2022 (5 ) (15 ) 83 63 (18 ) 45
Equity at 30 June 2022 175 (153 ) 1,745 1,767 92 1,859
Equity at 1 January 2021 180 (147 ) 1,405 1,438 71 1,509
Total changes in equity
Profit for the period - - 142 142 - 142
Other comprehensive income - 10 27 37 - 37
Total comprehensive income - 10 169 179 - 179
Share-based payment - - 2 2 - 2
Purchase of treasury shares - - (36 ) (36 ) - (36 )
Dividend to non-controlling interests - - - - (10 ) (10 )
Total changes in equity in 2021 - 10 135 145 (10 ) 135
Equity at 30 June 2021 180 (137 ) 1,540 1,583 61 1,644
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 15/20
Interim financial report
H1 2022
NOTES
1. Accounting policies
The interim financial report for the period 1 January to 30 June 2022 has been prepared in accordance with IAS 34
“Interim Financial Reporting” as adopted by the EU and additional Danish disclosure requirements for the interim
financial reports of listed companies. The application of IAS 34 means that the disclosures are more limited than in
a complete annual report, but that the interim financial report complies with the recognition and measurement
principles in the International Financial Reporting Standards (IFRS). The interim financial report has not been
reviewed by H+H’s auditors.
The accounting policies are consistent with those applied in the 2021 Annual Report, which includes a full
description of the accounting policies applied.
2. Adoption of new and revised IFRSs
H+H International A/S has adopted all new or revised and amended International Financial Reporting Standards
(IFRSs) and interpretations (IFRIC) issued by IASB and endorsed by the EU effective for the financial year 2022. It is
assessed that the revisions and amendments have not had a material impact on the consolidated financial
statements.
3. Income statement classified by function
It is Company policy to prepare the income statement based on an adapted classification of costs by function in
order to show EBIT before special items. Depreciation and amortisation of property, plant and equipment, and
intangible assets are therefore classified by function and presented on separate lines.
The above table shows an extract of the income statement adapted to show depreciation and amortisation
classified by function.
4. Geographical information
Amounts in DKK million Q2 2022 Q2 2021 H1 2022 H1 2021
Revenue 1,000 836 1,874 1,478
Cost of goods sold (714) (616) (1,376) (1,101)
Gross profit including depreciation and amortisation 286 220 498 377
Sales cost (58) (47) (109) (94)
Administrative costs (59) (48) (112) (97)
Other operating income and costs 8 - 10 3
EBIT before special items 177 125 287 189
Special items, net (9) - (19) -
EBIT 168 125 268 189
Depreciation and amortisation comprise:
Depreciation of property, plant and equipment 36 38 75 74
Amortisation of intangible assets 14 9 24 18
Total 50 47 99 92
Depreciation, amortisation and impairment are allocated to:
Production costs 34 31 66 62
Sales costs 12 11 25 22
Administration costs 4 5 8 8
Total 50 47 99 92
Amounts in DKK million Q2 2022 Q2 2021 H1 2022 H1 2021
Central Western Europe 440 403 836 695
United Kingdom 281 248 520 444
Poland 279 185 518 339
1,000 836 1,874 1,478
Revenue
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 16/20
Interim financial report
H1 2022
When presenting information on geographical areas, information on revenue is based countries with the exception
of the “Central Western Europe” region which comprises Germany, Switzerland, Denmark, Sweden, the Czech
Republic, Netherlands and Belgium. Revenue for Germany for Q2 2022 amounted to DKK 304 million (2021: DKK
278 million) and to DKK 556 million for the first six months 2022 (2021: DKK 462 million).
5. Special items, net
Special items for the first six months of 2022 comprise restructuring costs of DKK 19 million corresponding to an
increase of DKK 9 million compared to the first quarter 2022. Special items 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 Management.
6. Significant accounting estimates and judgements
The preparation of the consolidated financial statements requires Management to make certain estimates and
judgements concerning future events that may have material effect on the carrying amounts of assets and
liabilities.
For H+H, significant changes in the estimates and assumptions on which values are based may have a material
effect on the measurement of assets and liabilities, including impairment testing of goodwill and non-current
assets and net defined-benefit obligations.
With reference to Note 8 “Pension obligations”, significant accounting estimates and judgements have been made
in connection with the adjustment of the net defined-benefit pension obligation in the UK.
The estimates and judgements made are based on assumptions that Management assesses to be sound. However,
they are inherently uncertain and unpredictable. The assumptions may be incomplete, and unforeseen future
events or circumstances may occur.
Further details of H+H’s key accounting estimates and judgements that may affect the Company are provided in
the 2021 Annual Report.
7. Seasonal fluctuations
The sales pattern for H+H’s products is seasonal. Sales in the second and third quarters are traditionally
significantly higher than during the rest of the year. As a part of H+H’s cost base is not directly variable with
revenue, deviations from projected sales may result in considerable fluctuations in the Company’s earnings.
8. Pension obligations
H+H has defined-benefit pension plans in the UK, Switzerland, and Germany. The UK and Swiss pension plans are
managed by a pension fund to which payments are made, whereas the German pension plan is funded from
current earnings. H+H’s pension obligations predominantly relate to the plans in the UK.
For interim periods, H+H’s defined-benefit pension obligations are based on valuations from external actuaries
carried out at the end of prior financial year considering any subsequent movements in the obligation due to
pension costs, contributions etc. up until the reporting date. Actuarial calculations are updated or extrapolated
quarterly.
Amounts in DKK million Q2 2022 Q2 2021 H1 2022 H1 2021
Restructuring costs 9 - 19 -
Total 9 - 19 -
Impact of special items on EBIT
Cost of goods sold 9 12 -
Administrative costs - - 7 -
EBIT before special items 9 - 19 -
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 17/20
Interim financial report
H1 2022
On 30 June 2022, an updated actuarial valuation of the defined benefit plan in H+H UK, based on the April 2020
valuation agreed in January 2022, showed a net asset of DKK 34 million (GBP 3.8 million), triggering IFRIC 14
recognition of future committed pension contributions of the scheme as H+H UK do not have unconditional right
to a refund. Consequently, a net value of DKK 111 million (GBP 12.6 million) has been recognised as of 30 June
2022.
Compared to December 2021, and based on the above, a value adjustment (including the effects of IFRIC 14) has
been made relating to the UK pension plan, affecting total comprehensive income negatively by DKK 36 million net
of tax.
On 30 June 2022, the total pension obligation, including the recognition of future committed pension
contributions, amounted to DKK 101 million compared to DKK 85 million on 31 December 2021. The increase is
driven by payments, interest, value adjustment and currency adjustment.
9. Financial resources and cash flow
On 30 June 2022, net interest-bearing debt, totalled DKK 343 million, corresponding to a decrease of DKK 7 million
since the beginning of the year. The decrease in net interest-bearing debt since the beginning of the year was
primarily driven by earnings for the period, but partly offset by capital expenditures and the purchase of treasury
shares.
H+H’s financing is a committed credit facility with Nordea Danmark, a branch of Nordea Abp, Finland, maturing in
April 2024.
H+H’s financing is subject to usual financial covenants, which have been fulfilled in the second quarter of 2022 and
are also expected to be fulfilled for the full year 2022.
10. Share buy-back programme
On 16 February 2022, the share buy-back programme initiated in 2021 was concluded with 569,853 shares
acquired at total purchase price of DKK 115 million.
On 3 March 2022, H+H International A/S initiated a share buy-back programme in compliance with Article 5 of
Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse and
Commission Delegated Regulation (EU) 1052/2016 of 8 March 2016 (the “Safe Harbour Regulation”). The share
buy-back programme is in full described in Company Announcement no. 469 of 3 March 2022.
The share buy-back programme is expected to be realised over a 12-month period, starting from 4 March 2022.
Under the share buy-back programme, H+H may repurchase shares up to a maximum amount of DKK 150 million.
In first six months of 2022, a total of 494,400 shares were acquired at a total purchase price of DKK 85 million in
connection with the share buy-back programme initiated 2022.
11. Share-based payment
The performance-share-units schemes for 2020 and 2021 are active and presented in the 2021 Annual Report.
In March 2022, the Board of Directors of H+H International A/S implemented a new long-term incentive
programme (“LTIP”) being a performance share unit (“PSU”) programme similar to the LTIP PSU programme
launched in 2020 and 2021. At initiation, a total of 43.989 PSUs were granted to the participants, including 8.789
PSUs to CFO, Peter Klovgaard-Jørgensen. Based on the average share price for H+H shares trading on the Nasdaq
Copenhagen stock exchange during the first ten days after the release of the 2021 Annual Report on 3 March
2022, the theoretical value was DKK 182.81 per PSU, corresponding to a total theoretical value of DKK 8 million for
the 2022 LTIP based on the current participants and their receipt of PSU grants. The vesting period for the PSUs is
approximately three years, with vesting for the 2022 LTIP being in 2025 when the audited annual report for 2024 is
publicly announced.
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 18/20
Interim financial report
H1 2022
In the first six months of 2022, an expense of DKK 3 million was recognised under staff costs, on par with the same
period in 2021.
12. Tax on profit
13. Risk Management
H+H’s principal risks and the external factors that may affect H+H are provided in the 2021 Annual Report. These
are unchanged for the first six months of 2022.
14. Related parties
Related parties of H+H with significant influence include the Board of Directors and the Executive Board of the
Company and their close family members. Related parties also include companies in which the aforementioned
persons have control or significant interests.
Transactions with related parties
H+H did not enter into any significant transactions with members of the Board of Directors or with members of the
Executive Board, except for compensation and benefits received as a result of their membership of either the
Board of Directors, employment with H+H or shareholdings in H+H.
15. Business combinations
In the consolidated financial statements for 2021, the accounting of the acquisition of DOMAPOR was considered
provisional due to the fact that the transaction was closed on 31 December 2021, leaving limited time to identify
and determine fair value of assets acquired and liabilities assumed. Therefore, adjustments may be made to the
purchase price allocation for a period of up to 12 months from the acquisition date.
The initial purchase price allocation showed acquired net assets at fair value of DKK 80 million, and the minority
interest was measured at DKK 38 million as the proportionate share of the fair value of acquired identifiable net
assets. Consequently, related goodwill was determined at DKK 70 million (“the acquired goodwill method”).
In addition to the cash payment of DKK 112 million made on the acquisition date, H+H Deutschland GmbH entered
into a Domination and profit/loss transfer agreement ("DPLTA”) with the sellers of DOMAPOR whereby H+H
Deutschland GmbH for a 20-year period is obliged to pay an annual consideration of EUR 0.89 million for the first
ten years and EUR 0.82 million for the following ten years, allowing H+H Deutschland GmbH to obtain the rights
related to a minority shareholding of 47.5% in DOMAPOR, including the right to dividend paid out during this
period. In the consolidated financial statements for 2021, this obligation was disclosed as contingent liabilities. In
connection with determining the final purchase price, the obligation has been recognised as a liability as deferred
payments related to the acquisition.
Furthermore, the minority interest has been recognised at fair value, measured as the fair value of 47.5% minority
shareholding deducted by the discounted value of payments related to the DPLTA, a net amount of DKK 16 million,
hence goodwill consequently amounts to DKK 160 million. Goodwill has been measured by applying the “full
goodwill method” as the obligation related to the DPLTA represents a significant part of the fair value of the
minority shareholding of 47.5% in DOMAPOR.
Compared to what was disclosed in the 2021 Annual Report, the use of above method has resulted in the
recognition of additional goodwill of DKK 90 million, the recognition of deferred payments related to the
acquisition of DKK 112 million and an adjustment of the minority interest on the acquisition date of DKK 22 million.
Amounts in DKK million Q2 2022 Q2 2021 H1 2022 H1 2021
Current tax 37 21 61 33
Movement in deferred tax (2) 6 (3) 4
Tax on profit 35 27 58 37
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 19/20
Interim financial report
H1 2022
Other than the abovementioned adjustments in respect of the accounting of the acquisition of DOMAPOR, the
preliminary purchase price allocations for DOMAPOR and for the Feuchtwangen factory are unchanged compared
to what is disclosed in Note 25 in the 2021 Annual Report.
The accounting of both business combinations in 2021 may be subject to subsequent changes, as they are still
considered provisional.
16. Share capital
On 5 May 2022, and with reference to Company Announcement no. 479 of 31 March 2022 and Company
Announcement no. 485 of 5 May 2022, the approved reduction of the share capital by a nominal amount of DKK
4,833,650 from 179,833,650 to DKK 175,000,000 through the cancellation of 483,365 shares of nominally DKK
10.00 each was registered at the Danish Business Authority.
There have been no movements in the share capital in the last five years except for the changes stated in the
above paragraph.
Amounts in DKK million 2022 2021 2022 2021
Share capital at 1 January 17,983,365 17,983,365 180 180
Movements (483,365) - (5) -
Share capital at 30 June 17,500,000 17,983,365 175 180
Number
Nominal value, DKK million
DOMAPOR Feuchtwangen Total Total
30 June 30 June 30 June 31 December
(DKK million) 2022 2022 2022 2021
Customer relations and other intangible assets 52 - 52 52
Land and buildings 35 36 71 71
Plant and machinery 19 19 38 38
Financial assets 0 - 0 0
Receivables 17 - 17 17
Inventories 18 - 18 18
Cash
7 - 7 7
Acquired assets
148 55 203 203
Financial debt
28 - 28 28
Non-current provisions
- 11 11 11
Trade payables
0 - 0 0
Tax payables
3 - 3 3
Other current liabilities
9 1 10 10
Deferred tax
28 - 28 28
Assumed liabilities
68 12 80 80
Total identifiable acquired net assets
80 43 123 123
Hereof minority interests' share
(16) - (16) (38)
Goodwill in connection with the acquisition
160 83 243 153
Purchase price
224 126 350 238
Movements in cash flow in connection with the acquisition:
Purchase price
224 126 350 238
Of which is deferred payments
(112) - (112) -
Of which cash is acquired
7 - 7 7
Of which financial debt is acquired
(28) - (28) (28)
Net cash flow outflow in connection with the acquisition
91 126 217 217
DRAF
H+H International A/S • Lautrupsgade 7, 5th Floor • 2100 Copenhagen Ø • Denmark • Tel. +45 35 27 02 00 • www.HplusH.com • Company reg. no. 49 61 98 12 20/20
Interim financial report
H1 2022
17. Events after the balance sheet date
No events have occurred after the balance sheet date that will have a material effect on the parent company’s or
H+H’s financial position.