XCSE:HH ESEF Annual Report
H+H INTERNATIONAL A/S (XCSE:HH)
ESEF Annual Report
2023-05-23
For: 2023-03-31
View Original
Added on
September 23, 2026
DRAF
Interim financial report
Q1 2023
Company Announcement No. 536, 2023
10 May 2023
Interim Financial Report Q1 2023: Challenging start to the year as expected.
CHIEF EXECUTIVE OFFICER JÖRG BRINKMANN QUOTE
“As expected, it was a challenging start to the year with very low newbuild activities across our markets. In
response to the current market environment, we have adjusted our shift patterns and have also decided to
accelerate the optimization of our factory network, which will involve closing three factories in Germany and two in
Poland. Following recent investments in our factories, we have sufficient capacity for both present and future
needs, which puts us in a favourable position for when the market improves. Despite uncertain market conditions
and an expected challenge at the start of the year, we maintain the financial outlook for the full year, as we still
expect the market to continue to improve during the year“.
PERFORMANCE HIGHLIGHTS FOR Q1 2023 (Q1 2022)
• Sales volume (thousand cubic metres) decreased by 42% to 634 (1,087).
• Revenue decreased by 27% to DKK 641 million (DKK 874 million). Revenue growth measured in local currencies
(“organic growth”) was negative 25% (positive 29%).
• Gross profit before special items was DKK 154 million (DKK 244 million), corresponding to a gross margin of
24% (28%).
• EBIT before special items was DKK 21 million (DKK 110 million), corresponding to an EBIT margin before special
items of 3% (13%).
• Net profit of DKK (7) million (DKK 72 million).
• Free cash flow was DKK (309) million (DKK (63) million).
• Financial gearing was 1.4 times EBITDA at the end of Q1 2023 (0.7 times EBITDA at the end of Q1 2022).
DRAF
Interim financial report
Q1 2023
FINANCIAL HIGHLIGHTS FOR THE PERIOD 1 JANUARY 2023 TO 31 MARCH 2023
DKK million
Q1 2023
Q1 2022
Sales volume (thousand cubic metres)
634
1,087
Revenue
641
874
Organic growth
(25)%
29%
Gross margin before special items
24%
28%
EBITDA before special items
72
159
EBIT before special items
21
110
EBIT margin before special items
3%
13%
Special items
(9)
(10)
Return on Invested Capital (ROIC)
15%
21%
NIBD/EBITDA before special items ratio
1.4x
0.7x
Free cash flow
(309)
(63)
FINANCIAL OUTLOOK FOR 2023
The financial outlook for the full year 2023:
• Revenue growth measured in local currencies is expected to be around 0%.
• EBIT before special items is expected to be in the range of DKK 330 million to DKK 400 million.
The financial outlook for 2023 is based on the following specific assumptions:
• Sales volumes expected to decrease around 10-15% in aggregate mainly driven by Poland.
• Exchange rates, primarily GBP, EUR and PLN remain at end-April 2023 levels.
Q1 2023 INTERIM FINANCIAL REPORT CONFERENCE CALL
In connection with the release of the Q1 2023 Interim Financial Report, a conference call for investors and analysts
is scheduled for Wednesday 10 May 2023, 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
(PIN code: 275042):
DK: +45 78768490
UK: +44 203 769 6819
US: +1 646 787 0157
• 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 2022 of DKK 3.6 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 1,700 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 3/17
Interim financial report
Q1 2023
KEY FIGURES – H+H GROUP
Financial ratios have been calculated in accordance with recommendations from the Danish Society of Financial Analysts.
Q1 Q1 Full-year
Amounts in DKK million 2023 2022 2022
Income statement
Revenue 641 874 3,604
Gross profit before special items 154 244 1,020
EBITDA before special items 72 159 657
EBITDA 63 149 615
EBIT before special items 21 110 455
EBIT 12 100 413
Profit before tax 2 95 398
Profit for the period (7) 72 317
Balance sheet
Assets 3,873 3,461 3,750
Invested capital 2,223 1,921 2,142
Investments in property, plant and equipment 37 42 266
Net working capital 540 198 242
Equity 1,901 1,808 1,938
Net Interest-bearing debt (NIBD) 804 452 492
Cash flow
Cash flow from operating activities (272) (21) 316
Cash flow from investing activities (37) (42) (255)
Cash flow from financing activities 207 - (19)
Free cash flow (309) (63) 61
Financial ratios
Organic growth (25)% 29% 14%
Gross margin before special items 24% 28% 28%
EBITDA margin before special items 11% 18% 18%
EBITDA margin 10% 17% 17%
EBIT margin before special items 3% 13% 13%
EBIT margin 2% 11% 11%
Return on invested capital (ROIC) (excl. Goodwill) 15% 21% 19%
Solvency ratio 47% 49% 49%
NIBD/EBITDA before special items ratio 1.4x 0.7x 0.7x
Share data
Share price, end of period (DKK) 108 184 103
Book value per share, end of period (DKK) 117 104 110
Earnings per share (0.3) 3.9 17.1
Diluted earnings per share (0.3) 3.9 17.0
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 4/17
Interim financial report
Q1 2023
MANAGEMENT’S REVIEW
INCOME STATEMENT FOR THE FIRST QUARTER OF
2023
Revenue
Total revenue decreased by 27% to DKK 641 million
in Q1 2023 compared to DKK 874 million in Q1 2022.
Revenue growth before acquisitions and divestments
measured in local currencies (“organic growth”) was
negative 25% in Q1 2023 compared to positive 29%
in Q1 2022.
The lower revenue and organic growth were driven
by decreasing demand in all regions as a result of the
uncertainty in the housing market and higher
interest rates.
Revenue in the Central Western Europe region
decreased by 13% to DKK 345 million compared to
DKK 396 million in Q1 2022 driven by lower sales
volumes. Organic growth in the region was negative
12% 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 decreased by 39% to
DKK 146 million compared to DKK 239 million in Q1
2022. Organic growth in the United Kingdom was
negative 36%, which is demand driven slightly offset
by higher sales prices.
Revenue in Poland decreased by 37% to DKK 150
million compared to DKK 239 million in Q1 2022.
Organic growth was negative 36% driven by
decreasing demand, slightly offset by sales price
increases.
Of the total revenue in Q1 2023 of DKK 641 million,
AAC and CSU constituted 65% and 35%, respectively.
Production cost
Production cost decreased by 23% to DKK 487
million in Q1 2023 compared to DKK 630 million in
Q1 2022.
During first quarter of 2023, H+H has adjusted
production capacity due to the lower demand in the
market. In addition, more maintenance shutdowns
also impacted production costs compared to Q1
2022.
Gross profit
Gross profit amounted to DKK 154 million compared
to DKK 244 million in Q1 2022, corresponding to
gross margins of 24% and 28%, respectively.
Gross profit in the AAC and CSU businesses
amounted to DKK 98 million and DKK 56 million in
Q1 2023, respectively. This corresponded to gross
margins of 24% and 25% for AAC and CSU,
respectively.
EBITDA before special items
EBITDA before special items amounted to DKK 72
million compared to DKK 159 million in Q1 2022,
corresponding to EBITDA margins of 10% and 17%,
respectively.
Depreciation and amortisation
Depreciation and amortisation in Q1 2023 amounted
to DKK 51 million compared to DKK 49 million in Q1
2022.
EBIT before special items
EBIT before special items amounted to DKK 21
million in Q1 2023, compared to DKK 110 million in
Q1 2022, corresponding to EBIT margins before
special items of 3% and 13%, respectively.
Special items
Special items of DKK 9 million for Q1 2023 comprise
restructuring costs compared to DKK 10 million in Q1
2022. Please refer to Note 5 for more information
about special items for the period.
Net financials
Net financials totalled an expense of DKK 10 million
in Q1 2023, compared to an expense of DKK 5 million
in Q1 2022. The development is mainly driven by
increase in interest expenses driven by increased Net
interest-bearing debt.
Profit before tax
Profit before tax amounted to DKK 2 million in Q1
2023, compared to DKK 95 million in Q1 2022.
Tax
Tax for the period amounted to a net expense of
DKK 9 million compared to a net expense of DKK 23
Revenue, external
Amounts in DKK million 2023 2022
Central Western Europe 345 396
United Kingdom 146 239
Poland 150 239
Total 641 874
Q1
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 5/17
Interim financial report
Q1 2023
million in Q1 2022. Please refer to Note 12 for more
information about tax for the period.
Net profit
Net profit for the period amounted to a loss of DKK 7
million compared to a profit of DKK 72 million in Q1
2022.
Loss for the period is attributable to H+H
International A/S’ shareholders by DKK 5 million and
to non-controlling interests by DKK 2 million
compared to a profit of DKK 68 million and DKK 4
million, respectively, for Q1 2022.
Comprehensive income
Other comprehensive income for Q1 2023 totalled a
loss of DKK 29 million compared to a loss of DKK 43
million in Q1 2022. The year-on-year increase was
mainly driven by favourable foreign exchange rates.
CASH FLOW
Operating activities
Cash flow from operating activities amounted to DKK
negative 272 million in Q1 2023 compared to
negative DKK 21 million in Q1 2022. This was
primarily driven by lower earnings due to a lower
activity level as well as a negative working capital
development led by planned stock build and
inflation.
Investing activities
Cash flow from investing activities in Q1 2023
amounted to negative DKK 37 million compared to
negative DKK 42 million in Q1 2022.
Financing activities
Cash flow from financing activities amounted to DKK
207 million in the first quarter of 2023 compared to
DKK 0 million in 2022. The year-on-year increase was
mainly driven by a change in borrowings of DKK 217
million related to the development in earnings and
working capital in the first quarter of 2023.
BALANCE SHEET
On 31 March 2023, the balance sheet total
amounted to DKK 3,873 million compared to DKK
3,461 million on 31 March 2022.
Net interest-bearing debt
Net interest-bearing debt totalled DKK 804 million
on 31 March 2023 corresponding to an increase of
DKK 312 million since 31 December 2022.
The increase in net interest-bearing debt since the
beginning of the year was primarily driven by
planned stock build and inflationary impact on
working capital for the period.
On 31 March 2023, the Company’s financial gearing
was 1.4 times net interest-bearing debt to EBITDA,
which remains within the Company’s long-term
financial target of 1-2x EBITDA.
The Company’s net interest-bearing debt excluding
leasing totalled DKK 701 million on 31 March 2023,
corresponding to an unused committed bank facility
of DKK 0.3 billion.
Equity
The consolidated equity decreased by DKK 37 million
compared to 31 December 2022 and increased by
DKK 93 million compared to 31 March 2022.
Equity
Q1 Q1
Amounts in DKK million 2023 2022
1 January 1,938 1,814
Profit for the period (7) 72
Actuarial gains on pension plans (36) (35)
Foreign exchange adjustments 7 (8)
Purchase of treasury shares (2) (35)
Share based payment 1 -
31 March 1,901 1,808
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 6/17
Interim financial report
Q1 2023
CURRENT MARKET ENVIRONMENT
Building activity during the first quarter of 2023 saw
a notable decline, primarily driven by uncertainty
that led to a decrease in the issuance of permits,
delays in starts, and customer stock building in Q4
2022. Furthermore, unfavourable weather
conditions also played a role in the decline of
building activity during this period. In comparison,
Q1 2022 was characterized by strong post COVID-19
demand and sales price development.
In response to the current market environment, we
have decided to build resilience and mitigate the
impact of the lower market demand by accelerating
the planned optimisation of our factory network.
Effective from July 1, 2023, we will be closing our
German CSU factories in Demmin, Kronau and
Niederrimsingen as well as our AAC plant in Warsaw
and CSU plant in Pisz in Poland.
The optimisation plan involves transferring
production to nearby sites, while maintaining our
regional commercial presence. Our production
network has sufficient capacity to continuously serve
our customers.
We anticipate total restructuring cost classified as
special items in the range of DKK 70-80 million for
full-year 2023. In addition, net book value of
equipment related to the closures of around DKK
130 million is subject to impairment and treated as
special items. We expect this to be partly mitigated
by sale from or reuse of assets in the existing factory
network.
Despite declining markets, we were able to
successfully implement the planned price increases
throughout Q1 to cover inflation. Additionally, stock
was built up during Q1 to maximize plant utilization
before scaling back production in Q2.
In Germany, the number of building permits issued
declined by 25-30% year-on-year as of January. In
addition, high-interest rates have resulted in a
reduction of new mortgage loans for private
investors by approximately 35% since summer 2022.
Although there is some reluctance to undertake new
projects in multi-family houses before selling current
portfolios, the rental market remains undersupplied.
However, the number of building permits issued
continues to exceed the number of completions,
adding further to the construction backlog. The
German Association of Building Companies expect
245.000 completions of dwellings in 2023 equal to a
less severe, but still substantial, 13% decrease from
2022.
Additionally, despite the market downturn we
expect to benefit from our acquired AAC factory in
Feuchtwangen (south Germany) and recently
upgraded AAC factory in Wittenborn (north
Germany) which were both only partly operating in
2022.
In the UK, housing activity witnessed a significant
slowdown due to the prevailing high levels of
uncertainty, interest rates, and poor weather
conditions. However, consumer confidence is slowly
recovering from a low level and volume
housebuilder sales rates have improved in Q1 2023.
We continue to make progress in increasing AAC
penetration through foundation blocks and new
customers as planned. In the short term, we have
initiated resilience actions, including managing our
costs tightly. In the past our growth was capped by
our capacity, so our plan remains to increase the
capacity of our Borough Green plant during 2023,
adding 10% more volume in total UK capacity
starting from 2024 and thereby meeting future
customer demand.
In Poland, the building industry is significantly
affected by the high level of economic uncertainty.
The building activity is further constrained by
growing inflation and continued high interest rates,
leading to reduced loan capabilities for individual
investors.
The number of building permits has declined by 36%
year-on-year in February, with developers being the
most affected and the number of starts declined
approximately 40% for both individual investors and
developers. Despite this decline, the number of
building permits issued continues to exceed the
number of completions, which adds further to the
construction backlog.
The market conditions in Poland lead to a highly
competitive environment. However, we have
implemented our price increases in Q1 as planned.
Going forward we remain committed to pass on
inflation while monitoring the market carefully.
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 7/17
Interim financial report
Q1 2023
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 QUARTER
At the annual general meeting held 30 March 2023,
a reduction of the share capital by a nominal amount
of DKK 10,000,000 was approved. The share capital
decrease was registered with the Danish Business
Authorities on 4 May 2023.
EVENTS AFTER THE BALANCE SHEET DATE
After the balance sheet date, the approved
reduction of the share capital was registered at the
Danish Business Authority. Please refer to note 15
“Events after the balance sheet date”.
FINANCIAL OUTLOOK FOR 2023
The Company’s financial expectations for the full
year 2023 is maintained:
• Revenue growth measured in local currencies is
expected to be around 0%.
• EBIT before special items is expected to be in the
range of DKK 330 million to DKK 400 million.
ASSUMPTIONS FOR THE FINANCIAL OUTLOOK FOR
2023
Specific assumptions
The expectations for H+H’s financial performance in
2023 are based on certain specific and general
assumptions. Management believes that the most
significant of these assumptions relate to the
following items:
• Sales volumes expected to decrease around 10-
15% in aggregate mainly driven by Poland.
• Exchange rates, primarily GBP, EUR and PLN
remain at end-April 2023 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
H1 2023 Interim Financial Report
16 Aug. 2023
Q3 2023 Interim Financial Report
17 Nov. 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 8/17
Interim financial report
Q1 2023
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 quarter of 2023.
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 31 March 2023 and of the results of H+H’s operations and its cash flows for the period 1 January to 31
March 2023.
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 May 2023
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 9/17
Interim financial report
Q1 2023
CONDENSED INCOME STATEMENT
Q1 Q1 Full-year
Amounts in DKK million 2023 2022 2022
Revenue 641 874 3,604
Cost of goods sold (487 ) (630 ) (2,584 )
Gross profit before special items 154 244 1,020
Sales costs (37 ) (38 ) (170 )
Administrative costs (46 ) (49 ) (222 )
Other operating income and costs, net 1 2 29
EBITDA before special items 72 159 657
Depreciation and amortisation (51 ) (49 ) (202 )
EBIT before special items 21 110 455
Special items, net (9 ) (10 ) (42 )
EBIT 12 100 413
Financial income 2 1 6
Financial expenses (12 ) (6 ) (21 )
Profit before tax 2 95 398
Tax on profit (9 ) (23 ) (81 )
Profit for the period (7 ) 72 317
Profit for the period attributable to:
H+H International A/S' shareholders (5 ) 68 303
Non-controlling interest (2 ) 4 14
Profit for the period (7 ) 72 317
Earnings per share (EPS-Basic) (0.3 ) 3.9 17.1
Diluted earnings per share (EPS-D) (0.3 ) 3.9 17.0
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 10/17
Interim financial report
Q1 2023
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Q1 Q1 Full-year
Amounts in DKK million 2023 2022 2022
Profit for the period (7 ) 72 317
Items that may be reclassified subsequently to profit or loss:
Foreign exchange adjustments, foreign entities 7 (8 ) (17 )
Items that will not be reclassified subsequently to profit:
Actuarial gains and losses (45 ) (41 ) 18
Tax on actuarial gains and losses 9 6 (1 )
(36 ) (35 ) 17
Other comprehensive income after tax (29 ) (43 ) -
Total comprehensive income for the period (36 ) 29 317
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 11/17
Interim financial report
Q1 2023
CONDENSED BALANCE SHEET
Group
31 March 31 December 31 March
Amounts in DKK million 2023 2022 2022
ASSETS
Non-current assets
Goodwill 420 419 363
Other intangible assets 259 253 276
Property, plant and equipment 1,814 1,822 1,717
Deferred tax assets 11 17 15
Financial assets 5 6 6
Total non-current assets 2,509 2,517 2,377
Current assets
Inventories 686 523 335
Receivables 242 174 316
Cash 436 536 433
Total current assets 1,364 1,233 1,084
TOTAL ASSETS 3,873 3,750 3,461
EQUITY AND LIABILITIES
Equity
Share capital 175 175 180
Retained earnings 1,780 1,822 1,660
Other reserves (148 ) (155 ) (146 )
Equity attributable to H+H International A/S’ shareholders 1,807 1,842 1,694
Equity attributable to non-controlling interests 94 96 114
Total equity 1,901 1,938 1,808
Non-current liabilities
Pension obligations 60 23 112
Provisions 37 38 42
Deferred tax liability 95 110 127
Credit institutions 1,137 920 785
Deferred payments, acquisition of subsidiary
Lease liabilities 79 81 79
Total non-current liabilities 1,513 1,277 1,145
Current liabilities
Lease liabilities 24 27 21
Trade payables 266 278 282
Income tax 34 37 32
Deferred payment, acquisition of subsidiary
Provisions 6 9 2
Other payables 122 177 171
Total current liabilities 459 535 508
Total liabilities 1,972 1,812 1,653
TOTAL EQUITY AND LIABILITIES 3,873 3,750 3,461
Net interest-bearing debt 804 492 452
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 12/17
Interim financial report
Q1 2023
CONDENSED CASH FLOW STATEMENT
Q1 Q1
Amounts in DKK million 2023 2022
Operating profit (EBIT)
Financial income, received
Financial expenses, paid
(12 ) (6 )
Depreciation and amortisation
Gain and losses on sale of assets and other non-cash effects
(2 ) 1
Change in working capital
(301 ) (133 )
Change in provisions and pension contribution
(8 ) (18 )
Income tax paid
(14 ) (15 )
Operating activities (272 ) (21 )
Acquisition of property, plant and equipment and intangible assets (37 ) (42 )
Investing activities (37 ) (42 )
Change in borrowings 217 42
Change in lease liabilities (8 ) (7 )
Purchase of treasury shares (2 ) (35 )
Financing activities 207 -
Total cash flow for the period (102 ) (63 )
Cash and cash equivalents, opening 536 499
Foreign exchange adjustments of cash 2 (3 )
Cash and cash equivalents at 31 March 436 433
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 13/17
Interim financial report
Q1 2023
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 2023 175 (155 ) 1,822 1,842 96 1,938
Total changes in equity
Profit for the period - - (5 ) (5 ) (2 ) (7 )
Other comprehensive income - 7 (36 ) (29 ) - (29 )
Total comprehensive income - 7 (41 ) (34 ) (2 ) (36 )
Share-based payment - - 1 1 - 1
Purchase of treasury shares - - (2 ) (2 ) - (2 )
Total changes in equity in 2023 - 7 (42 ) (35 ) (2 ) (37 )
Equity at 31 March 2023 175 (148 ) 1,780 1,807 94 1,901
Equity at 1 January 2022 180 (138 ) 1,662 1,704 110 1,814
Total changes in equity
Profit for the period - - 68 68 4 72
Other comprehensive income - (8 ) (35 ) (43 ) - (43 )
Total comprehensive income - (8 ) 33 25 4 29
Purchase of treasury shares - - (35 ) (35 ) - (35 )
Total changes in equity in 2022 - (8 ) (2 ) (10 ) 4 (6 )
Equity at 31 March 2022 180 (146 ) 1,660 1,694 114 1,808
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 14/17
Interim financial report
Q1 2023
NOTES
1. Accounting policies
The interim financial report for the period 1 January to 31 March 2023 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 2022 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 2023. 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.
Amounts in DKK million Q1 2023 Q1 2022
Revenue 641 874
Cost of goods sold (521) (662)
Gross profit including depreciation and amortisation 120 212
Sales cost (49) (51)
Administrative costs (51) (53)
Other operating income and costs 1 2
EBIT before special items 21 110
Special items, net (9) (10)
EBIT 12 100
Depreciation and amortisation comprise:
Depreciation of property, plant and equipment 40 39
Amortisation of intangible assets 11 10
Total 51 49
Depreciation, amortisation and impairment are allocated to:
Production costs 34 32
Sales costs 12 13
Administration costs 5 4
Total 51 49
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 15/17
Interim financial report
Q1 2023
4. Geographical information
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 Q1 2023 amounted to DKK 230 million (2022: DKK
265 million).
5. Special items, net
Special items for the first quarter of 2023 comprise restructuring costs of DKK 9 million compared to DKK 10 million
in Q1 2022. Special items comprise restructuring costs in Central Western Europe and Poland.
6. Significant estimates and judgements
Determining the carrying amounts of some assets and liabilities requires Management to make judgements,
estimates and assumptions concerning future events. The estimates and assumptions made are based on historical
experience and other factors that are believed by Management to be sound under the circumstances but that, by
their nature, are uncertain and unpredictable.
The estimates and assumptions may be incomplete or inaccurate, and unforeseen events or circumstances may
occur. Moreover, the H+H Group is subject to risks and uncertainties that may lead to the actual outcomes
differing from these estimates and assumptions. It may be necessary to change estimates and assumptions made
previously as a result of changes in the factors on which these were based or as a result of new knowledge or
subsequent events.
Further details of H+H’s significant estimates and judgements that may affect the Company are provided in note 2
in the 2022 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.
Amounts in DKK million Q1 2023 Q1 2022
Central Western Europe 345 396
United Kingdom 146 239
Poland 150 239
641 874
Revenue
Amounts in DKK million Q1 2023 Q1 2022
Restructuring costs 9 10
Total 9 10
Impact of special items on EBIT
Cost of goods sold 5 3
Administrative costs 4 7
EBIT before special items 9 10
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 16/17
Interim financial report
Q1 2023
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.
On 31 March 2023, 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 6 million (GBP 0.8 million), triggering IFRIC 14
recognition of future committed pension contribution of the scheme, as H+H UK do not have unconditional right to
refund. Consequently, a net value of DKK 57 million (GBP 6.7 million) has been recognised as of 31 March 2023.
Compared to December 2022, and based on the above, a value adjustment (including the effects of IFRIC 14), has
been made relating to UK pension plan, affecting total comprehensive income negatively by DKK 36 million net of
tax.
The total pension obligation, including the recognition of future committed pension contributions, on 31 March
2023 amounts to DKK 60 million, compared to DKK 23 million on 31 December 2022. The increase is driven by
payments, interest, value adjustment and currency adjustment.
9. Financial resources and cash flow
On 31 March 2023, net interest-bearing debt, totalled DKK 804 million, corresponding to an increase of DKK 312
million since the beginning of the year. The increase in net interest-bearing debt since the beginning of the year
was primarily driven by lower earnings due to a lower activity level as well as a negative working capital
development led by planned stock build.
On 1 March 2023, a new committed credit facility was agreed with Nordea Danmark, branch of Nordea Abp,
Finland, effectively in place 31 March 2023. The agreement has a duration of 3 years.
H+H’s financing is subject to usual financial covenants, which have been fulfilled in the first quarter of 2023 and
are also expected to be fulfilled for the full year 2023.
10. Share buy-back programme.
On 4 January 2023, the share buy-back programme initiated in 2022 was concluded with 1,118,800 shares
acquired at total purchase price of DKK 150 million.
11. Share-based payment
The performance-share-units schemes for 2022 and 2021 are active and presented in the 2022 Annual Report.
In the first quarter of 2023, an expense of DKK 1 million was recognised under staff costs compared to an expense
of DKK million in Q1 2022.
12. Tax on profit
Amounts in DKK million Q1 2023 Q1 2022
Current tax 10 24
Movement in deferred tax (1) (1)
Tax on profit 9 23
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 17/17
Interim financial report
Q1 2023
13. Risk Management
H+H’s principal risks and the external factors that may affect H+H are provided in the 2022 Annual Report. These
are unchanged for the first quarter of 2023.
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. Events after the balance sheet date
On 4 May 2023, and with reference to Company Announcement no. 532 of 30 March 2023 the general meeting
approved a reduction of the share capital by a nominal amount of DKK 10,000,000 from 175,000,000 to DKK
165,000,000, through cancellation of 1,000,000 shares of nominally DKK 10.00 each, corresponding to 5.71% of the
total share capital.
Other than above, no events have occurred after the balance sheet date that will have a material effect on the
parent company’s or the H+H Group’s financial position.