H+H International (HH) Investor Update summary

Market conditions and outlook

• German market volumes and prices have deteriorated, significantly impacting group results and leading to a downward revision of the 2025 outlook to around 4% organic growth.

• The UK market is robust, with all plants running 24/7 and strong demand, while Poland remains stable despite some uncertainty and declining building permits.

• No significant recovery is expected in Germany, which continues to weigh on group performance.

• Sales volume declined by 2%, mainly due to Germany and the UK, partially offset by Poland.

• Financial gearing stands at 2.6x EBITDA, which is manageable but not ideal.

Strategic actions and restructuring

• German operations are shifting from nationwide coverage to six regional profit centers, supported by a central back office and unified ERP system, to lower costs and improve margins.

• Restructuring will incur DKK 80–100 million in special items in H2 2025, with expected annual savings of DKK 20 million in 2025 and DKK 40 million in 2026.

• Two German plants will be permanently closed, with significant asset impairments totaling around DKK 600 million, including DKK 250 million in goodwill write-downs.

• The restructuring aims to make the German business at least cash flow neutral, focusing on building positive EBITDA and EBIT over time.

• Non-cash benefits from asset impairments of DKK 15 million are expected in H2 2025 and DKK 15 million in 2026.

Financial and operational impact

• The German business is now operating at about 50% of its 2022 volume, with capacity utilization well below profitable levels.

• Excluding Germany, the group is achieving double-digit EBIT margins, close to long-term targets.

• Q2 2025 revenue was DKK 719 million, with H1 revenue at DKK 1,394 million and a 22% gross margin.

• Preliminary H1 2025 results show 1% organic growth and DKK 40 million EBIT before special items.

• Lower depreciation of around DKK 30 million annually is expected due to asset impairment.