H+H International (HH) Q1 2025 earnings summary

Executive summary

• Q1 2025 performance aligned with expectations, with strong UK growth and capacity ramp-up supporting a positive outlook, while Germany remained challenging and Poland stable but with lower volumes.

• Strategic focus has shifted from restructuring to profitable growth, emphasizing plant network efficiency and customer engagement.

• Ongoing ramp-up of UK production capacity impacted gross margin, with optimization efforts underway to increase utilization.

• Full-year guidance maintained, with anticipated margin benefits from UK capacity ramp-up in H2 2025.

• Poland's market cooled after the 2% program but remains fundamentally strong and continues to contribute positively.

Financial highlights

• Revenue rose to DKK 675 million, up 5% from DKK 644 million in Q1 2024; organic growth of 3% year-over-year.

• Gross margin improved to 22% from 17% in Q1 2024, with gross profit before special items at DKK 146 million.

• EBIT margin before special items rose to 2% from negative 3% year-over-year; EBITDA margin to 9% from 4%.

• Free cash flow was negative DKK 71 million, an improvement from negative DKK 91 million in Q1 2024, mainly due to working capital seasonality and planned payments.

• Net interest-bearing debt increased to DKK 765 million as of March 31, 2025.

Outlook and guidance

• Organic revenue growth for 2025 expected between 5% and 10%, with EBIT before special items forecasted at DKK 120–180 million.

• Modest volume growth anticipated, mainly in the UK; no recovery assumed for Germany.

• CapEx for 2025 projected at DKK 200 million, in line with depreciation.

• Gross margin expected to improve in H2 2025 as operational efficiency increases, especially in the UK.

• Price increases are expected to align with cost inflation.