H+H International

Earnings Release • Aug 16, 2018

Interim financial report H1 2018

Interim financial report H1 2018

Company announcement no.: 366

“Our volume-driven organic growth shows strong market demand in our footprint. Especially Poland has delivered exceptionally well both on volume and prices”, says CEO Michael T. Andersen. “Integration of the acquired businesses are running to schedule and the factory upgrade in Borough Green was commissioned as planned, this in combination with a continuous strong market demand for the second half of the year gives room for an upgrade of our guidance.”

Highlights for the period 1 January to 30 June 2018

DKK million	Q2 2018	Q2 2017	H1 2018	H1 2017
Revenue	709	445	1,143	822
Organic growth	16%	0%	11%	3%
EBITDA before special items	117	74	157	111
EBIT margin before special items *	10%	12%	7%	9%
Special items	7	9	23	14
Financial gearing	2.9	2.3	2.9	2.3
Free cash flow excluding acquisitions and divestments	125	41	25	(53)

** Margins are impacted by the planned standstill of the Borough Green factory and accelerated

depreciations in relation to orderbooks and trademarks from the acquisitions of HDKS and Grupa Silikaty.*

Other highlights

• A rights issue for the existing shareholders was completed in the second quarter. The company received a gross proceed of DKK 525 million from the offering, in line with expectations. Net proceeds from the offering was DKK 504 million.
• Closing of the acquisition of Grupa Ożarów’s calcium silicate unit business Grupa Silikaty in Poland 4 April 2018 (i.e. three months included in the consolidated financials for H1 2018).
• Integration of the acquired businesses are running to schedule.
• The upgrade of the Borough Green factory was commissioned as planned.

Outlook for 2018

H+H updates its outlook for 2018:

• Growth before acquisitions and measured in local currencies is expected to be around 11% (previously around 5%).
• EBITDA before special items is expected to be DKK 370-410 million (previously DKK 350-390 million).
• Approximately DKK 25-30 million costs are expected to be incurred as a result of the Borough Green factory upgrade and resulting need to import products from sister companies. The increased transportation costs will be expensed at the point of sale and treated as a special item (unchanged).
• Approximately DKK 40 million for transaction and integration costs for HDKS and Grupa Silikaty will be expensed as special items (unchanged).
• Investments excluding the acquisition of enterprises and related land, property and related deferred payments are expected to be in the region of DKK 150 million of which approximately DKK 35 million relates to an investment required at one of the HDKS plants damaged by fire during the acquisition process. A similar amount was covered by a reduction in the purchase price (unchanged).

Investor teleconference

H+H International A/S will host an investor teleconference on 16 August 2018 at 11.30 a.m. CEST.

To attend the conference call dial +45 35 27 02 29 and meeting ID is 28238.

For further information please contact:

Michael T Andersen, CEO, or Bjarne Pedersen, Vice President, Business Development & IR, on telephone +45 35 27 02 00.

Attachment

• 366 Interim financial report H1 2018