Interim Financial Report Q1 2023: Challenging start to the year as expected

Company Announcement No. 536, 2023

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 optimisation 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)
   

FINANCIAL HIGHLIGHTS FOR THE PERIOD 1 JANUARY 2023 TO 31 MARCH 2023

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.
   

For further information please contact:
Niclas Bo Kristensen
Head of Investor Relations & Treasury
+45 24 48 03 67
Nbk@hplush.com

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.