H+H International (HH) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked a turnaround with a 24% gross margin, the highest EBIT in seven quarters, and 5% volume growth, mainly from Poland and the UK, while Germany remained weak.

• Operational improvements included reopening the Pollington plant in the UK and selling the Warsaw plant, strengthening financial flexibility and reducing gearing.

• Organic growth was led by volume increases in Poland and the UK, offset by declines in Central Western Europe.

• The sale of the closed Warsaw plant in October 2024 improved financial gearing and provided a significant cash inflow.

Financial highlights

• Gross margin improved to 24% from 20% year-over-year, with Q3 2024 revenue at DKK 729 million and gross profit at DKK 174 million.

• EBIT before special items reached DKK 53 million (7% margin), up from DKK 13 million (2%) last year.

• Sales volume increased by 5% compared to Q3 2023.

• Free cash flow was DKK 122 million, more than doubling from DKK 54 million a year earlier.

• Net result for Q3 2024 was DKK 19 million, compared to a loss of DKK 29 million in Q3 2023.

Outlook and guidance

• 2024 revenue growth in local currencies expected to be around 0%.

• EBIT before special items for 2024 guided to DKK 50–80 million, narrowed from previous DKK 50–100 million.

• Year-end financial gearing anticipated to be around 3x EBITDA before special items, aided by the Warsaw land sale.