H+H International (HH) Q4 2024 earnings summary

Executive summary

• Achieved 6% organic growth in Q4 2024, reversing a -26% decline from the prior year, with strong contributions from Poland and the U.K., while Germany remained weak; full-year organic growth was flat.

• Streamlined operations by closing and mothballing plants, reducing headcount by 25%, and integrating German operations for efficiency.

• Focused on ESG, reducing CO2 emissions by 30% since 2019 and achieving a record low lost time incident frequency of 0.9.

• Sale of Warsaw plant completed, significantly improving cash flow and reducing net debt.

Financial highlights

• Q4 gross margin reached 25%, with EBITDA margin at 13% and EBIT margin at 6% before special items, all significantly improved year-over-year.

• Full-year EBITDA margin was 9%, despite volumes being 30% below 2022 levels.

• Q4 revenue grew 8% (6% organic), with 7% volume growth year-over-year; full-year revenue was flat, in line with guidance.

• Free cash flow in Q4 was DKK 166 million, with full-year free cash flow at DKK 219 million, both improved by asset sales and destocking.

• Net interest-bearing debt at year-end was DKK 682 million, with financial gearing at 2.7x EBITDA.

Outlook and guidance

• 2025 guidance: organic growth of 5%-10%, EBIT before special items of DKK 120-180 million.

• Modest volume growth expected, mainly from the U.K.; no significant recovery anticipated in Germany.

• Capex planned at around DKK 200 million for 2025; no special items planned, with smaller restructurings included in guidance.

• Price increases to continue, especially in the U.K. and Poland, to offset inflation; Germany remains challenging for pricing.

• Continued macroeconomic and geopolitical uncertainty expected.