“Poland performed exceptionally well in a quarter that overall was impacted by the planned stand-still of the factory in Borough Green and extreme weather conditions in March”, says CEO Michael T. Andersen. “The result is in line with our expectations and with the acquisitions into calcium silicate products we are ready to take advantage of our improved market position.”
Financial highlights
- Revenue including the acquired business for the first quarter increased by 15% in DKK to DKK 434 million (2017: DKK 377 million). Revenue, excluding the acquired business, increased by 5% in local currencies (organic growth) (2017: 6%).
- EBITDA before special items for the first quarter was DKK 40 million (2017: DKK 37 million).
- EBIT before special items for the first quarter was DKK 13 million (2017: DKK 17 million). EBIT margin before special items for the first quarter was 3% (2017: 5%). EBIT before special items for the first quarter has been negatively affected by the planned stand still of the factory in Borough Green and amortisation of order book and trademark identified in the purchase price allocation of HDKS. Adjusted for these items, EBIT-margin would have been higher than last year. The impact of the items will predominately affect first half of 2018.
- Special items for the first quarter was DKK 16 million (2017: DKK 5 million), of which DKK 7 million is related to sale in the UK of imported products and DKK 9 million related to transaction and integration costs of HDKS and Grupa Silikaty.
- Free cash flow excluding acquisitions and divestments for the first quarter was DKK (99) million (2017: (94) million). The development is mainly due to normal seasonal increases in working capital.
- Net interest-bearing debt at 31 March 2018 was DKK 1,352 million (31 March 2017: DKK 483 million). The increase in net-interest bearing debt is primarily related to the acquisition of HDKS.
Other highlights
- Closing of the acquisition of HeidelbergCement’s German and Swiss calcium silicate unit business (HDKS) 28 February 2018 (i.e. one month included in the consolidated financials for Q1 2018).
- Closing of the acquisition of Grupa Ożaróws calcium silicate unit business (Grupa Silikaty) in Poland 4 April 2018 (i.e. not included in the consolidated financials for Q1 2018).
- Authorization from the annual general assembly 19 April 2018 to the board of directors to increase the company's share capital with net proceeds of around DKK 500 million by issuing new shares with pre-emptive subscription rights for existing shareholders. Assuming unchanged market conditions, the share issue will be executed in near future.
- Integration of the acquired business and the upgrade of the Borough Green factory are running to schedule.
Outlook for 2018
H+H reiterates its outlook for 2018:
- Growth before acquisitions and measured in local currencies is expected to be around 5%.
- EBITDA before special items is expected to be DKK 350-390 million.
- Approximately DKK 25-30 million cost 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.
- Approximately DKK 35 million for transaction and integration costs for HDKS will be expensed as special items.
- Approximately DKK 5 million for transaction and integration costs for Grupa Silikaty will be expensed as special items.
- Investments excluding mergers, acquisitions and divestments 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.
Investor teleconference
H+H International A/S will host an investor teleconference on 17 May 2018 at 10.30 a.m. CET.
To attend the conference call dial +45 35 27 02 29 and meeting ID is 428905.
Kent Arentoft Michael T Andersen
Chairman of the Board of Directors CEO
For further information please contact:
Michael T Andersen, CEO, or Bjarne Pedersen, Vice President, Business Development & IR, on telephone +45 35 27 02 00.
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