XCSE:HH ESEF Annual Report
H+H INTERNATIONAL A/S (XCSE:HH)
ESEF Annual Report
2022-11-17
For: 2022-09-30
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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
H+H International A/S
Lautrupsgade 7, 5.
2100 Copenhagen Ø
Denmark
Telephone +45 35 27 02 00
www.HplusH.com
CVR No. 49 61 98 12
LEI: 213800GJODT6FV8QM841
Date:
10 November 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 third quarter (“Q3 2022”) and the first nine months of 2022 (“Q1-Q3
2022”).
CHIEF EXECUTIVE OFFICER JÖRG BRINKMANN QUOTE
“I’m very excited to join H+H and to be part of the highly committed organisation. I am pleased to see the benefits
of the agile business model and how H+H is capable to offset the continued inflationary pressure with sales price
increases and taking advantage of its factory network established over the recent years. Our focus will remain to
service customers across our footprint and deliver according to our long-term commitments. The short-term
business environment is challenging market demand but at the same time, it also represents a great possibility to
position H+H for a successful future and realize the full potential of the company.”
PERFORMANCE HIGHLIGHTS FOR Q3 2022 (Q3 2021)
• Revenue increased by 13% to DKK 920 million (DKK 811 million).
• Revenue growth before acquisitions and divestments measured in local currencies (“organic growth”) was 7%
(13%).
• Gross profit was DKK 254 million (DKK 250 million), corresponding to a gross margin of 28% (31%).
• EBIT before special items was DKK 110 million (DKK 125 million), corresponding to an EBIT margin before
special items of 12% (15%).
• Net profit of DKK 82 million (DKK 88 million).
• Free cash flow was DKK 36 million (DKK 5 million).
• Financial gearing was 0.5 times EBITDA at the end of Q3 2022 (0.3 times EBITDA at the end of Q3 2021).
Company Announcement No. 517, 2022
Q1-Q3 2022 Interim Financial Report: high-inflation environment continued to drive
price increases, while market demand started to soften
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
Q1-Q3 2022
FINANCIAL HIGHLIGHTS FOR THE PERIOD 1 JANUARY 2022 TO 30 SEPTEMBER 2022
DKK million
Q3 2022
Q3 2021
Q1-Q3 2022
Q1-Q3 2021
Sales volume (thousand cubic metres)
1,019
1,176
3,288
3,328
Revenue
920
811
2,794
2,289
Organic growth
7%
13%
16%
14%
Gross margin before special items
28%
31%
29%
30%
EBITDA before special items
160
171
546
452
EBIT before special items
110
125
397
314
EBIT margin before special items
12%
15%
14%
14%
Special items
(9)
(4)
(28)
(4)
Return on Invested Capital (ROIC)
24%
21%
24%
21%
Free cash flow
36
5
138
145
NIBD/EBITDA before special items ratio
0.5x
0.3x
0.5x
0.3x
FINANCIAL OUTLOOK FOR 2022
The financial outlook for the full year 2022 is narrowed:
• Revenue growth before acquisitions and divestments measured in local currencies ("organic growth") is
expected to be around 15% (previously 15% to 20%).
• EBIT before special items is expected to be in the range of DKK 440 million to DKK 470 million (previously 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 November 2022 levels.
• Costs of energy costs and raw materials are expected to remain at current levels.
Q1-Q3 2022 INTERIM FINANCIAL REPORT CONFERENCE CALL
In connection with the release of the Q1-Q3 2022 Interim Financial Report, a conference call for investors and
analysts is scheduled for Thursday 10 November 2022, at 10:00 a.m. CEST. On the call, Chief Executive Officer
(“CEO”) Jörg Brinkmann 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:
DK: +45 78 15 01 07
UK: +44 333 300 9263
US: +1 646 722 4904
• 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 32 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
Q1-Q3 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.
Q3 Q3 Q1-Q3 Q1-Q3 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Income statement
Revenue 920 811 2,794 2,289 3,020
Gross profit before special items 254 250 818 689 905
EBITDA before special items 160 171 546 452 591
EBITDA 151 167 518 448 567
EBIT before special items 110 125 397 314 408
EBIT 101 121 369 310 377
Profit before tax 98 115 357 294 356
Profit for the period 82 88 283 230 321
Balance sheet
Assets 3,705 3,291 3,705 3,291 3,400
Invested capital* 2,034 1,832 2,034 1,832 1,852
Investments in property, plant and equipment** 65 44 149 105 197
Acquisition and divestment of enterprises - 127 - 127 238
Net working capital 205 39 205 39 65
Equity 1,868 1,693 1,868 1,693 1,814
Net Interest-bearing debt (NIBD) 368 181 368 181 350
Cash flow
Cash flow from operating activities 101 176 287 377 454
Cash flow from investing activities (65) (171) (149) (232) (427)
Cash flow from financing activities (22) 1 (92) 31 (25)
Free cash flow 36 5 138 145 27
Financial ratios
Organic growth 7% 13% 16% 14% 13%
Gross margin before special items 28% 31% 29% 30% 30%
EBITDA margin before special items 17% 21% 20% 20% 20%
EBITDA margin 16% 21% 19% 20% 19%
EBIT margin before special items 12% 15% 14% 14% 14%
EBIT margin 11% 15% 13% 14% 12%
Return on invested capital (ROIC) (excl. Goodwill) 24% 21% 24% 21% 20%
Solvency ratio 48% 49% 48% 49% 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) 100 224 100 224 230
Book value per share, end of period (DKK) 107 95 107 95 102
Earnings per share 4.4 4.7 15.7 12.7 17.5
Diluted earnings per share 4.4 4.7 15.7 12.7 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
Q1-Q3 2022
MANAGEMENT’S REVIEW
INCOME STATEMENT FOR THE THIRD QUARTER OF
2022
Revenue
Total revenue increased by 13% to DKK 920 million
in Q3 2022 compared to DKK 811 million in Q3 2021.
Revenue growth before acquisitions and divestments
measured in local currencies (“organic growth”) was
7% in Q3 2022 compared to 13% in Q3 2021.
The relatively higher organic growth was driven by
the continued implementation of sales price
increases to counter the continued high inflationary
pressure, 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 as well as a softening
of sales volumes in Poland.
Revenue in the Central Western Europe region
increased by 14% to DKK 406 million compared to
DKK 355 million in Q3 2021 driven by revenue from
acquisitions. Organic growth in the region was
negative 2% 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 20% to
DKK 296 million compared to DKK 247 million in Q3
2021. Organic growth in the United Kingdom was
20%, mainly driven by higher sales prices.
Revenue in Poland increased by 4% to DKK 218
million compared to DKK 209 million in Q3 2021.
Organic growth was 9%, driven by higher sales prices
partly offset by lower sales volumes.
Of the total revenue in Q3 2022 of DKK 920 million,
AAC and CSU constituted 71% and 29%, respectively.
Production cost
Production cost remained 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 third quarter of 2022 continued
the planned upgrade of the German factory in
Wittenborn, resulting in relatively lower production
output and higher production costs in the period.
Gross profit
Gross profit amounted to DKK 254 million compared
to DKK 250 million in Q3 2021, corresponding to
gross margins of 28% and 31%, respectively.
Gross profit in the AAC and CSU businesses
amounted to DKK 172 million and DKK 82 million in
Q3 2022, respectively. This corresponded to gross
margins of 26% and 30% for AAC and CSU,
respectively.
EBITDA before special items
EBITDA before special items amounted to DKK 160
million compared to DKK 171 million in Q3 2021,
corresponding to EBITDA margins of 17% and 21%,
respectively.
Depreciation and amortisation
Depreciation and amortisation in Q3 2022 amounted
to DKK 50 million compared to DKK 46 million in Q3
2021. The increase related to companies acquired in
2021.
EBIT before special items
EBIT before special items amounted to DKK 110
million in Q3 2022, compared to DKK 125 million in
Q3 2021, corresponding to EBIT margins before
special items of 12% and 15%, respectively.
Special items
Special items of DKK 9 million for Q3 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 3 million in
Q3 2022, compared to an expense of DKK 6 million in
Q3 2021. The development is driven by lower
interest expenses, net.
Profit before tax
Profit before tax amounted to DKK 98 million in Q3
2022, compared to DKK 115 million in Q3 2021.
Tax
Tax for the period amounted to a net expense of
DKK 16 million compared to a net expense of DKK 27
million in Q3 2021. Please refer to Note 12 for more
information about tax for the period.
Revenue, external
Amounts in DKK million 2022 2021 2022 2021
Central Western Europe 406 355 1.242 1.050
United Kingdom 296 247 816 691
Poland 218 209 736 548
Total 920 811 2.794 2.289
Q3
Q1-Q3
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
Q1-Q3 2022
Net profit
Net profit for the period amounted to DKK 82 million
compared to DKK 88 million in Q3 2021.
Profit for the period is attributable to H+H
International A/S’ shareholders by DKK 78 million
and to non-controlling interests by DKK 4 million
compared to DKK 85 million and DKK 3 million,
respectively, for Q3 2021.
Comprehensive income
Other comprehensive income for Q3 2022 totalled a
loss of DKK 28 million compared to a loss of DKK 14
million in Q3 2021. The year-on-year decrease was
mainly driven by unfavourable foreign exchange
rates.
INCOME STATEMENT FOR THE FIRST NINE MONTHS
OF 2022
Revenue
Total revenue for the first nine months of 2022
increased by 22% to DKK 2,794 million compared to
DKK 2,289 million in the first nine months of 2021.
Organic growth was 16% in the first nine months of
2022 compared to 14% for the first nine months of
2021.
Of the total revenue of DKK 2,794 million, AAC and
CSU constituted 71% and 29%, respectively.
Gross profit
Gross profit in the first nine months 2022 increased
by 19% to DKK 818 million compared to DKK 689
million in 2021, corresponding to gross margins of
29% and 30%, respectively.
Gross profit in the AAC and CSU businesses
amounted to DKK 571 million and DKK 247 million,
respectively. This compares to DKK 501 million and
DKK 188 million in the first nine months of 2021 for
the AAC and CSU businesses, respectively.
EBITDA before special items
EBITDA before special items in the first nine months
of 2022 increased by 21% to DKK 546 million
compared to DKK 452 million in 2021, corresponding
to EBITDA margins of 20% and 20%, respectively.
Depreciation and amortisation
Depreciation and amortisation in the first nine
months of 2022 amounted to DKK 149 million
compared to DKK 138 million in first nine months of
2021. The increase relates to companies acquired in
2021.
EBIT before special items
EBIT for the first nine months of 2022 increased by
26% to DKK 397 million compared to DKK 314 million
in 2021, corresponding to EBIT margins of 14% and
14%, respectively.
Special items
Special items for the first nine months of 2022
comprise restructuring costs of DKK 28 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 12 million
in the first nine months of 2022, compared to an
expense of DKK 16 million in 2021. The development
is driven by lower interest expenses, net.
Profit before tax
Profit before tax for the first nine months of 2022
amounted to DKK 357 million, compared to DKK 294
million in first nine months of 2021.
Tax
Tax for the period amounted to a net expense of
DKK 74 million compared to a net expense of DKK 64
million in first nine months of 2021. Please refer to
Note 12 for more information about tax for the
period.
Net profit
Profit in the first nine months of 2022 increased by
23% to DKK 283 million, compared to DKK 230
million in 2021.
Profit for the period is attributable to H+H
International A/S’ shareholders by DKK 275 million
and to non-controlling interest by DKK 8 million
compared to DKK 227 million and DKK 3 million,
respectively, for the first nine months of 2021.
Comprehensive income
Other comprehensive income for the first nine
months of 2022 was negative DKK 79 million
compared to positive DKK 23 million in 2021, mainly
driven by changes in actuarial losses net of deferred
tax of DKK 66 million related to pension obligations
as well as foreign exchange adjustments of DKK 39
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
Q1-Q3 2022
CASH FLOW
Operating activities
Cash flow from operating activities amounted to DKK
101 million in Q3 2022 compared to DKK 176 million
in Q3 2021. This was mainly driven by changes in
working capital.
Cash flow from operating activities in the first nine
months of 2022 was DKK 287 million against DKK 377
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 inventories and trade debtors as result of the
relatively high market activity.
Investing activities
Cash flow from investing activities in Q3 2022
amounted to negative DKK 65 million compared to
negative DKK 171 million in Q3 2021, whereof DKK
127 million relates to acquisitions.
Cash flow from investing activities in first nine
months of 2022 was negative DKK 149 million,
compared to negative DKK 232 million in the first
nine months of 2021.
Financing activities
Cash flow from financing activities amounted to
negative DKK 116 million in first nine months of 2022
compared to positive DKK 31 million in 2021. The
year-on-year decrease was mainly driven by a
change in borrowings of negative DKK 86 million and
the purchase of treasury shares of DKK 69 million in
connection with the ongoing share buy-back
programme.
BALANCE SHEET
On 30 September 2022, the balance sheet total
amounted to DKK 3,681 million compared to DKK
3,291 million on 30 September 2021.
Net interest-bearing debt
Net interest-bearing debt totalled DKK 368 million
on 30 September 2022 corresponding to a increase
of DKK 18 million since 31 December 2021.
The increase 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 September 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 274 million on 30 September
2022, corresponding to an unused committed bank
facility of DKK 0.8 billion.
Equity
The consolidated equity increased by DKK 54 million
compared to 31 December 2021 and increased by
DKK 175 million compared to 30 September 2021.
Equity
Q1-Q3 Q1-Q3
Amounts in DKK million 2022 2021
1 January 1,814 1,509
Profit for the period 283 230
Actuarial gains on pension plans (41) 22
Foreign exchange adjustments (38) 1
Dividend to non-controlling
interests
- (10)
Purchase of treasury shares (132) (63)
Adjustment to non-controlling
interests arising from acquisition
(22) -
Other adjustments 4 4
30 September 1,868 1,693
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
Q1-Q3 2022
CURRENT MARKET ENVIRONMENT
Increasing inflation, geopolitical instabilities and the
continued interest rate increases have started to
impact customer demand in especially Poland and
Germany and is expected to continue rest of the
year.
Germany faces increasing inflation rates, in large
part due to rising energy prices due to uncertainty of
future supply. This has caused the number of
building permits for new buildings issued to decline
by 11% in August year-on-year. Further, the rising
inflation is driving an increasing trend of
postponements of construction starts.
In Q3, the Wittenborn factory was shut down for the
upgrade and is currently in ramp up. The update of
the Wittenborn factory gives strength to H+H’s AAC
factory network which will help drive market share
across Germany and into adjacent markets.
In the Nordics, building permits have started to
decrease and the latest economic analyses point to a
negative outlook for the construction industry due to
increased inflation and a shortage of labour and
materials. However, current activity levels remain
stable capped by the production output, and we
continue to view favourably at our market position
in Nordics.
In Switzerland and the Benelux countries,
uncertainties from current geopolitical events
continue to weigh on the expected economic growth
and building activities.
In the United Kingdom (“UK”), private housing
demand remains relatively resilient, but the
combination of increased inflation and rising interest
rates have led to decreases in expected starts.
While activity levels for the remainder of 2022
remains stable, the increased levels of uncertainty
fuel the anticipation of more difficult conditions in
the medium term. As H+H recently have
undersupplied compared to customer demand, we
view favourably at our position to serve the UK
market.
As we remain positive on the long-term
fundamentals, we continue to seek opportunities to
further increase our UK capacity.
In Poland, increased inflation and rising interest
rates have adversely impacted Polish purchasing
power and caused low visibility. This has driven a
decrease in construction starts over the January to
September period of 17% compared to 2021.
However, the number of building permits issued
over the January to September period remains at a
reasonable level partly driven by changes in
legislation, and housing completions remains stable.
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.
The expansion of the Company’s AAC factory in Reda
with one additional CSU production line was
completed as planned and is now supplying to the
Polish market.
In summary, during the third quarter, H+H has
experienced changes in market conditions across our
footprint, resulting in declining market demand in
Poland and Germany. H+H expects a continued
declining trend in market demand as inflation and
interest rates continue to drive uncertainty and low
consumer confidence. H+H remains committed to
defend its margins by continued implementation of
sales price increases to counter the high inflationary
pressure.
Generally, H+H’s diversified geographical footprint
and strong factory networks provide a resilient
market position. In addition, H+H has initiated
specific resilience actions to mitigate impacts from a
potential continued declining market demand. These
measures include adjusting production capacity
where needed and utilizing governmental support
programmes where available. Also, actions have
been taken to reduce and manage the operating cost
base where relevant.
These expectations are based on the assumptions of
continuous availability of relevant energy sources
and raw materials and neither escalations of the war
in Ukraine nor further recessionary developments in
any of the Company’s current markets.
In the long term, the European housing market
continues to have strong underlying growth
opportunities driven by a structural undersupply of
housing, demographic growth, and urbanisation.
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
Q1-Q3 2022
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 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 financial outlook for the full year 2022 is
narrowed:
• Revenue growth before acquisitions and
divestments measured in local currencies
("organic growth") is expected to be around 15%
(previously 15% to 20%).
• EBIT before special items is expected to be in the
range of DKK 440 million to DKK 470 million
(previously 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 November
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 2023
2022 Annual Report
2 Mar. 2023
2023 Annual General Meeting
30 Mar. 2023
Q1 2023 Interim Financial Report
10 May 2023
H1 2023 Interim Financial Report
17 Aug. 2023
Q3 2023 Interim Financial Report
17 Nov. 2023
Please note that items for the agenda for the 2023
Annual General Meeting must be submitted at least
six weeks before the meeting (i.e., before 16
February 2023).
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
Q1-Q3 2022
STATEMENT BY THE EXECUTIVE BOARD AND THE BOARD OF DIRECTORS
The Executive Board and the Board of Directors have today discussed and approved the interim financial report for
H+H International A/S for the first three quarters of 2022.
The interim financial report, which has not been audited or reviewed by the H+H’s auditors, has been prepared in
accordance with IAS 34 “Interim Financial Reporting” as adopted by the EU and the Danish disclosure
requirements for the interim financial reports of listed companies.
It is our opinion that the interim financial report gives a true and fair view of H+H’s assets, liabilities, and financial
position on 30 September 2022 and of the results of H+H’s operations and its cash flows for the period 1 January
to 30 September 2022.
Furthermore, it is our opinion that management’s review provides a fair account of developments in H+H’s
operations and financial conditions, the results for the period and H+H’s overall financial position, as well as a
description of the most significant risks and uncertainties that H+H faces.
Copenhagen, 10 November 2022
EXECUTIVE BOARD
Jörg Brinkmann
CEO
Peter Klovgaard-Jørgensen
CFO
BOARD OF DIRECTORS
Kent Arentoft
Chairman
Stewart Antony Baseley
Volker Christmann
Kajsa von Geijer
Miguel Kohlmann
Helen MacPhee
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
Q1-Q3 2022
CONDENSED INCOME STATEMENT
Q3 Q3 Q1-Q3 Q1-Q3 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Revenue 920 811 2,794 2,289 3,020
Cost of goods sold (666 ) (561 ) (1,976 ) (1,600 ) (2,115 )
Gross profit before special items 254 250 818 689 905
Sales costs (41 ) (36 ) (125 ) (108 ) (143 )
Administrative costs (53 ) (46 ) (157 ) (135 ) (186 )
Other operating income and costs, net (0 ) 3 10 6 15
EBITDA before special items 160 171 546 452 591
Depreciation and amortisation (50 ) (46 ) (149 ) (138 ) (183 )
EBIT before special items 110 125 397 314 408
Special items, net (9 ) (4 ) (28 ) (4 ) (31 )
EBIT 101 121 369 310 377
Financial income 1 1 3 2 4
Financial expenses (4 ) (7 ) (15 ) (18 ) (25 )
Profit before tax 98 115 357 294 356
Tax on profit (16 ) (27 ) (74 ) (64 ) (35 )
Profit for the period 82 88 283 230 321
Profit for the period attributable to:
H+H International A/S' shareholders 78 85 275 227 310
Non-controlling interest 4 3 8 3 11
Profit for the period 82 88 283 230 321
Earnings per share (EPS-Basic) 4.4 4.7 15.7 12.7 17.5
Diluted earnings per share (EPS-D) 4.4 4.7 15.7 12.7 17.5
Group
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Interim financial report
Q1-Q3 2022
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Q3 Q3 Q1-Q3 Q1-Q3 Full-year
Amounts in DKK million 2022 2021 2022 2021 2021
Profit for the period 82 88 283 230 321
Items that may be reclassified subsequently to profit or loss:
Foreign exchange adjustments, foreign entities (23 ) (9 ) (38 ) 1 9
(23 ) (9 ) (38 ) 1 9
Items that will not be reclassified subsequently to profit:
Actuarial gains and losses 1 (6 ) (39 ) 27 47
Tax on actuarial gains and losses (6 ) 1 (2 ) (5 ) (11 )
(5 ) (5 ) (41 ) 22 36
Other comprehensive income after tax (28 ) (14 ) (79 ) 23 45
Total comprehensive income for the period 54 74 204 253 366
Group
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Interim financial report
Q1-Q3 2022
CONDENSED BALANCE SHEET
Group
30 September 31 December 30 September
Amounts in DKK million 2022 2021 2021
ASSETS
Non-current assets
Goodwill 453 364 292
Other intangible assets 272 296 243
Property, plant and equipment 1,718 1,707 1,598
Deferred tax assets 15 17 12
Financial assets 7 6 6
Total non-current assets 2,465 2,390 2,151
Current assets
Inventories 442 321 247
Receivables 270 190 233
Cash 528 499 660
Total current assets 1,240 1,010 1,140
TOTAL ASSETS 3,705 3,400 3,291
EQUITY AND LIABILITIES
Equity
Share capital 175 180 180
Retained earnings 1,773 1,662 1,595
Other reserves (176 ) (138 ) (146 )
Equity attributable to H+H International A/S’ shareholders 1,772 1,704 1,629
Equity attributable to non-controlling interests 96 110 64
Total equity 1,868 1,814 1,693
Non-current liabilities
Pension obligations 91 85 109
Provisions 41 41 33
Deferred tax liability 126 137 134
Credit institutions 802 743 730
Deferred payments, acquisition of subsidiary 105 - -
Lease liabilities 74 85 90
Total non-current liabilities 1,239 1,091 1,096
Current liabilities
Lease liabilities 20 21 21
Trade payables 292 251 250
Income tax 59 23 37
Deferred payment, acquisition of subsidiary 7 - -
Provisions 5 5 3
Other payables 215 195 191
Total current liabilities 598 495 502
Total liabilities 1,837 1,586 1,598
TOTAL EQUITY AND LIABILITIES 3,705 3,400 3,291
Net interest-bearing debt 368 350 181
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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 13/20
Interim financial report
Q1-Q3 2022
CONDENSED CASH FLOW STATEMENT
Q3 Q3 Q1-Q3 Q1-Q3
Amounts in DKK million 2022 2021 2022 2021
Operating profit (EBIT)
Financial income, received
Financial expenses, paid
(4 ) (7 ) (15 ) (18 )
Depreciation and amortisation
Gain and losses on sale of assets and other non-cash effects
Change in working capital
(27 ) 42 (138 ) 13
Change in provisions and pension contribution
(5 ) (7 ) (32 ) (21 )
Income tax paid
(17 ) (24 ) (44 ) (51 )
Operating activities 101 176 287 377
Acquisition of enterprises - (127 ) - (127 )
Acquisition of property, plant and equipment and intangible assets (65 ) (44 ) (149 ) (105 )
Investing activities (65 ) (171 ) (149 ) (232 )
Change in borrowings 31 34 59 121
Change in lease liabilities (6 ) (6 ) (19 ) (20 )
Purchase of treasury shares (47 ) (27 ) (132 ) (63 )
Dividend to non controlling interets - - - (7 )
Financing activities (22 ) 1 (92 ) 31
Total cash flow for the period 14 6 46 176
Cash and cash equivalents, opening 526 657 499 481
Foreign exchange adjustments of cash (12 ) (3 ) (17 ) 3
Cash and cash equivalents at 30 September 528 660 528 660
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Interim financial report
Q1-Q3 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 - - 275 275 8 283
Other comprehensive income - (38 ) (41 ) (79 ) - (79 )
Total comprehensive income - (38 ) 234 196 8 204
Share-based payment - - 4 4 - 4
Purchase of treasury shares - - (132 ) (132 ) - (132 )
Share capital decrease, note 16 (5 ) - 5 - - -
Adjustment to non-controlling interests arising
from acquisition
Total changes in equity in 2022 (5 ) (38 ) 111 68 (14 ) 54
Equity at 30 September 2022 175 (176 ) 1,773 1,772 96 1,868
Equity at 1 January 2021 180 (147 ) 1,405 1,438 71 1,509
Total changes in equity
Profit for the period - - 227 227 3 230
Other comprehensive income - 1 22 23 - 23
Total comprehensive income - 1 249 250 3 253
Share-based payment - - 4 4 - 4
Purchase of treasury shares - - (63 ) (63 ) - (63 )
Dividend to non-controlling interests - - - - (10 ) (10 )
Total changes in equity in 2021 - 1 190 191 (7 ) 184
Equity at 30 September 2021 180 (146 ) 1,595 1,629 64 1,693
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Interim financial report
Q1-Q3 2022
NOTES
1. Accounting policies
The interim financial report for the period 1 January to 30 September 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 Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
Revenue 920 811 2,794 2,289
Cost of goods sold (700) (592) (2,076) (1,693)
Gross profit including depreciation and amortisation 220 219 718 596
Sales cost (53) (47) (162) (141)
Administrative costs (57) (50) (169) (147)
Other operating income and costs - 3 10 6
EBIT before special items 110 125 397 314
Special items, net (9) (4) (28) (4)
EBIT 101 121 369 310
Depreciation and amortisation comprise:
Depreciation of property, plant and equipment 41 36 116 110
Amortisation of intangible assets 9 10 33 28
Total 50 46 149 138
Depreciation, amortisation and impairment are allocated to:
Production costs 34 31 100 93
Sales costs 12 11 37 33
Administration costs 4 4 12 12
Total 50 46 149 138
Amounts in DKK million Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
Central Western Europe 406 355 1,242 1,050
United Kingdom 297 247 817 691
Poland 218 209 736 548
920 811 2,794 2,289
Revenue
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Interim financial report
Q1-Q3 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 Q3 2022 amounted to DKK 316 million (2021: DKK
247 million) and to DKK 872 million for the first nine months 2022 (2021: DKK 709 million).
5. Special items, net
Special items for the first nine months of 2022 comprise restructuring costs of DKK 28 million corresponding to an
increase of DKK 24 million compared to transaction cost of DKK 4 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 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 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 Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
Transaction and restructuring costs 9 4 28 4
Total 9 4 28 4
Impact of special items on EBIT
Cost of goods sold 9 - 21 -
Administrative costs - 4 7 4
EBIT before special items 9 4 28 4
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
Q1-Q3 2022
On 30 September 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 28 million (GBP 3.3 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 98 million (GBP 11.0 million) has been recognised as of 30
September 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 41 million net
of tax.
On 30 September 2022, the total pension obligation, including the recognition of future committed pension
contributions, amounted to DKK 91 million compared to DKK 85 million on 31 December 2021. The increase is
driven by payments, interest and value adjustment.
9. Financial resources and cash flow
On 30 September 2022, net interest-bearing debt, totalled DKK 368 million, corresponding to an increase of DKK
18 million since the beginning of the year. The increase 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 third 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 nine months of 2022, a total of 770,300 shares were acquired at a total purchase price of DKK 115 million in
connection with the share buy-back programme initiated in 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. Subsequently, the PSUs granted has been increased to 60.289 PSUs,
including 17,000 PSUs to CEO Jörg Brinkmann. 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 11
million for the 2022 LTIP based on the current participants and their receipt of PSU grants. The vesting period for
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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 18/20
Interim financial report
Q1-Q3 2022
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.
In the first nine months of 2022, an expense of DKK 4 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 nine 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.
Amounts in DKK million Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
Current tax 15 25 76 58
Movement in deferred tax 1 2 (2) 6
Tax on profit 16 27 74 64
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Interim financial report
Q1-Q3 2022
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.
For Feuchtwangen, an adjustment related to value of plant and machinery has been made decreasing it by DKK 1
million, consequently increasing goodwill.
Other than the abovementioned adjustments in respect of the accounting of the acquisitions, the preliminary
purchase price allocations are unchanged compared to what is disclosed in Note 25 in the 2021 Annual Report.
The accounting of the DOMAPOR business combinations may be subject to subsequent changes, as it is still
considered provisional.
16. Share capital
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 September 17,500,000 17,983,365 175 180
Number
Nominal value, DKK million
DOMAPOR Feuchtwangen Total Total
30 September 30 September 30 September 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 18 37 38
Financial assets 0 - 0 0
Receivables 17 - 17 17
Inventories 18 - 18 18
Cash
7 - 7 7
Acquired assets
148 54 202 203
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 42 122 123
Hereof minority interests' share
(16) - (16) (38)
Goodwill in connection with the acquisition
160 84 244 153
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
Q1-Q3 2022
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.
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.