In This Article:
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Revenue Growth UK: 11% increase in Q2 compared to last year.
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Revenue Growth Poland: 36% increase in Q2, driven by a successful 2% loan program.
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Revenue Loss Germany: 25% decrease in Q2 due to declining new build market.
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Gross Margin: 18% in Q2, down from 24% last year, impacted by gas hedges and de-stocking.
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Restructuring Costs: DKK13 million in Q2, with further costs expected in CWE region.
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Debt: Approximately DKK1 billion, with financial gearing within bank covenants.
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Expected Land Sale Gain: Net gain of DKK140-150 million from Warsaw land sale.
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Guidance Update: Organic growth around 0%; EBIT before special items narrowed to DKK50-100 million.
Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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H+H International AS (FRA:J0H) reported double-digit revenue growth in the UK and Poland, with the UK seeing an 11% increase and Poland a remarkable 36% increase in Q2.
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The company is reinstating capacity in response to positive market trends, including reopening the Pollington plant in the UK and increasing shifts in Poland.
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The potential sale of the Warsaw plant is expected to improve liquidity and financial gearing, aligning with long-term financial targets.
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The company has successfully reduced stock levels to a more manageable 1.5 months, which is expected to stabilize gross margins in the second half of the year.
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H+H International AS (FRA:J0H) has achieved significant cost savings, reducing fixed costs by DKK50 million per quarter, which equates to DKK200 million annually.
Negative Points
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The German market is underperforming, with a 25% revenue loss in Q2 due to a decline in new build activity and high construction costs.
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Gross margins have been negatively impacted by unfavorable gas hedges and destocking, with a reported gross margin of 18% compared to 24% last year.
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Financial gearing has increased, although it remains within bank covenants, due to lower EBITDA over the last 12 months.
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The company anticipates further restructuring costs in the CWE region due to market deterioration.
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The guidance for organic growth and EBIT before special items has been narrowed to the lower end of the previous range, reflecting challenges in the German market and production disruptions.
Q & A Highlights
Q: Can you update on the underlying margin performance in Q2, adjusting for destocking and gas hedges? A: The underlying impact is similar to Q1. Adjusting for destocking and gas hedges, the clean gross margin is in the 24%-25% range. (Bjarne Pedersen, CFO)