H+H International

M&A Activity • Feb 6, 2015

Company Announcement No. 313, 2015

Copenhagen, Denmark, 2015-02-06 14:52 CET (GLOBE NEWSWIRE) --

H+H International A/S
Dampfærgevej 3, 3rd Floor
2100 Copenhagen Ø
Denmark
Telephone: +45 35 27 02 00
www.HplusH.com
Company reg. no. 49 61 98 12

Further to the completion of H+H’s acquisition of Grupa Prefabet S.A. in Poland
on 5 February 2015, an overall Polish restructuring plan is announced

The new structure for H+H’s activities in Poland will lead to closure of three
factories in addition to the already mothballed H+H factory in Skawina, which
will be closed permanently, leaving six factories in operation. Once
restructured, the Polish aircrete activities are expected to generate increased
earnings, in line with the expectations announced cf. Company Announcement No.
301 of 9 October 2014.

The Polish aircrete market is the biggest in Europe but activity levels have
dropped significantly in recent years due to the economic slowdown, leading to
extensive overcapacity, very low selling prices and, in consequence, a lack of
profitability among producers.

H+H International A/S has previously highlighted a need for significant
restructuring to normalise the market and create a natural balance between
market demand and available capacity. H+H is now taking the lead in this by
actively closing three more factories in addition to the already mothballed H+H
factory in Skawina, which will be closed permanently.

In the future, H+H’s activities in Poland will comprise a total of six
factories: the two factories in Reda and Zelislawice acquired from Grupa
Prefabet and the four H+H Polska factories in Warsaw, Pulawy, Lidzbark and
Gorzkowice.

An unavoidable and regrettable consequence of the necessary restructuring is
redundancies involving around 200 employees.

Michael T. Andersen, CEO of H+H International A/S, says:

“A significant restructuring process, with factories being closed and around
200 employees being made redundant, is necessary to restore profitability.
After several years of loss making in Poland, we expect H+H to be able to
return to satisfactory earnings levels.

Being profitable is the best long-term guarantee of a stable workplace for our
employees.”

Significant synergies are expected over the next two years:

-- Production capacity utilisation at H+H’s factories will be improved as the
higher production volumes will be produced by fewer factories, although H+H
does not expect to reach the same production volume as the current combined
nine factories would have achieved
-- Cost synergies can be obtained on the production
-- There will be fixed cost savings in consequence of the new organisation
-- Location of the factories will improve H+H’s geographical market position
from Reda in north Poland via Warsaw in the central region to Zelislawice
in the south

EBITDA, excluding special items, is expected to increase by approximately DKK
10 million in 2015, partly due to planned synergies. Integration costs,
recognised as special items, will be approximately DKK 20 million. Over the
next four years, the ambition is to increase the EBIT margin for the combined
Polish activities to a level in line with H+H’s long-term EBIT margin target of
over 6%, assuming that conditions in the Polish market improve and the
restructuring plan progresses as scheduled.

The combined net working capital of H+H Polska and Grupa Prefabet is expected
to be reduced by approximately DKK 20 million during 2015.

To achieve the optimal production set-up for the six remaining factories in
Poland, H+H expects to make additional investments totalling approximately DKK
20 million during 2015 and 2016.

Finally, over the next two to three years H+H expects to be able to sell off
assets (land, buildings, equipment and scrapped steel) at a total sales price
exceeding DKK 70 million.

Kent Arentoft
Chairman of the Board of Directors

Michael T Andersen
CEO

For additional information please contact:
Michael T Andersen, CEO, or Bjarne Pedersen, Vice President, Business
Development & IR,
on telephone +45 35 27 02 00.

This is a translation of the company's announcement in Danish. In case of
inconsistency between the Danish text and this English translation, the Danish
text will take precedence.