Half Year 2026 H+H International AS Earnings Call

August 12, 2026

Speaker #1: Welcome to H+H International. First Half of 2026 Results Presentation. This call is being recorded. For the first part of this call, all participants will be in listen-only mode.

Operator: Welcome to H+H International H1 2026 results presentation. This call is being recorded. For the first part of this call, all participants will be in a listen only mode. Afterwards, there will be a question and answer session. To ask a question during the Q&A, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. I will now hand it over to the speakers, CEO Jörg Brinkmann and CFO Bjarne Pedersen. Please begin.

Operator: Welcome to H+H International H1 2026 Results Presentation. This call is being recorded. For the first part of this call, all participants will be in a listen only mode. Afterwards, there will be a question and answer session. To ask a question during the Q&A, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. I will now hand it over to the speakers, CEO Jörg Brinkmann and CFO Bjarne Pedersen. Please begin.

Speaker #1: Afterwards, there will be a question-and-answer session. To ask a question during the Q&A, please press five-star on your telephone keypad. To withdraw your question, you may do so by pressing five-star again.

Speaker #1: I'll now hand it over to the speakers: CEO Jorg Brinkmann and CFO Bjarne Pedersen. Please begin.

Speaker #3: Good morning, and welcome to our earnings call for the first half of 2026. My name is Bjarne Pedersen, CFO of the company, and joining us today is our CEO, Jorg Brinkmann.

Bjarne Pedersen: Good morning and welcome to our earnings call for the H1 2026. My name is Bjarne Pedersen, CFO of the company, and joining us today is our CEO, Jörg Brinkmann. Before we dive into the presentation, I would like to lead your attention to slide number 2, where we have a disclaimer on the forward-looking statements. After that, we will hand over to CEO Jörg Brinkmann.

Speaker #3: Before we dive into the presentation, I would like to direct your attention to slide number two, where we have a disclaimer on the forward-looking statements.

Speaker #3: And after that, we'll hand over to CEO Jorg Brinkmann.

Speaker #4: Yeah, thank you. And good morning, everyone. Thanks for taking the time to dial in and listen to our Q2 and first half 2026 update.

Jörg Brinkmann: Yeah. Thank you and good morning everyone. Thanks for taking the time to dial in and listening in to our Q2 and H1 2026 update. With that, please turn to page 3, where I want to provide some of the highlights in the quarter. What you can see from the quarterly results is that after the Q1, which was heavily impacted by winter weather, we saw normalization of activities, which is definitely good. In that environment, we delivered a 6% organic growth and an EBIT margin of 6%, so back to normal. The result was mainly driven by strong activity in Poland, but also the German business developed in the right direction. With the residing Q2, we are now on break even. So we see a zero EBIT. From here we are going to proceed. Second observation in the Q2 is in the UK.

Speaker #4: And with that, please turn to page three, where I want to provide some of the highlights in the quarter. So, what you can see from the quarterly results is that after Q1, which was heavily impacted by winter weather, we saw normalization of activities, which is definitely good.

Speaker #4: And in that environment, we delivered 6% organic growth and an EBIT margin of 6%. So, back to normal. The result was mainly driven by strong activity in Poland, but also the German business developed in the right direction.

Speaker #4: With the resulting Q2, we are now at break-even, so we see a zero EBIT, and from here, we're going to proceed. Second observation, the second.

Speaker #4: In the second quarter, this is in the UK. So here we saw some slowdown of activities, and I'll come to that a little bit later.

Jörg Brinkmann: Here we saw some slowdown of activities, and I come to that a little bit later. It is a particular situation we need to talk about. There is a new government in place. I want to give a little bit of highlights on how we see the UK, but certainly it is a watch-out area for our business in Q2 and also when we go into the H2 of 2026. A third driver is the strategic changes we have done to the German organization. We talked a lot about that, especially last year. Some big adjustments we have done to the business, and it is good to see that the strategic changes taking ground here and are contributing, improving our business in Germany and the CWE region.

Speaker #4: It's a particular situation we need to talk about. You know, there's a new government in place, so I want to give a little bit of highlights on how we see the UK, but certainly, it's a watch-out area for our business in the second quarter and also when we're going into the second half of 2026 now.

Speaker #4: A third driver is the strategic changes we've made to the German organization. You know, we talked a lot about that, especially last year—some big adjustments we've made to the business.

Speaker #4: And it's good to see that the strategic changes taking ground here are contributing to improving our business in Germany and the CWE region.

Speaker #4: Our focus is on managing the cash flow, and that is also, from our point of view, a positive result—that we came in with a free cash flow of €117 million, which comes from two elements.

Jörg Brinkmann: Our focus is on managing the cash flow, and that is also, from our point of view, a positive result that we came in with a free cash flow of DKK 117 million, which comes from two elements. One is strong operations, but also from some asset sales that we are driving. That is certainly a good outcome and helps to bring our debt position into a definitely better space. With that trending here, we are also committed to keep our full year outlook for the year. Let us zoom in a little bit into our three markets. Please turn to page 4 where we can see the Polish business results. Let me start with the market. Building permits is one of the key indicators we are looking at to see where the markets are going. What you can see is really strong development on building permits.

Speaker #4: One is strong operations, but also from some asset sales that we are driving. That is certainly a good outcome and helps to bring our debt position into a definitely better space.

Speaker #4: With that, turning here, we are also committed to keeping our full-year outlook for the year. Let's zoom in a little bit into our three markets, and please turn to page four, where we can see the Polish business results.

Speaker #4: Let me start with the market. Building permits is one of the key indicators we are looking at to see where the markets are going.

Speaker #4: What you can see is really strong development on building permits. We see a 19% year-on-year, which is definitely a good number. There are some legislation changes coming up, so there's a little bit of, let's say, forward effects in here, but nevertheless, there is strong underlying activity in the Polish market.

Jörg Brinkmann: We see a 19% year-on-year, which is a definitely a good number. There are some legislation changes coming up, so there is a little bit of, let us say, forward effects in here. Nevertheless, there is strong underlying activity in the Polish market, and this is true for the general economy, but then also for the building environment. So very friendly and very positive market environment, and some good investment climate into new build. We are positive also for the future, and we see a quite strong pipeline of projects and activity in the market. In that environment, you can see it from the numbers here. We have delivered a stronger revenue and volume quarter than the quarter last year. Again, with 25% EBITDA margin, a really strong profitability as well. Both numbers are ahead of last year, which is also quite a positive contribution to our group results.

Speaker #4: And this is true for the general economy, but also for the built environment. So, very friendly and positive market environment, and a good investment climate for new builds.

Speaker #4: We are positive also for the future, and we see quite a strong pipeline of projects and activity in the market. In that environment, you can see it from the numbers here.

Speaker #4: We've delivered a stronger revenue and volume quarter than the quarter last year. And again, with a 25% EBITDA margin, a really strong profitability as well.

Speaker #4: So both numbers are ahead of last year, which is also quite a positive contribution to our group results. And then we talked about, in the last earnings call, that we did an upgrade as part of our home initiatives in our plant in Puławy.

Jörg Brinkmann: We talked about, in the last earnings call, that we did an upgrade as part of our Home initiatives in our plant in Puławy. What I can report is here that the plant is back in operations, and it was really nice to see it, actually, that it is performing better than it was before the upgrade. This is how it should be, but it is good to see that also in the financial numbers. The plant is performing better and also contributing to a payback of our investment here. Overall, good market situation in Poland, but then also our team in Poland are really using the conditions in the market to perform really well in that friendly environment. On page 5, you are going to see the overview of UK. When you look at the registrations here, we see a different trend line.

Speaker #4: What I can report is that the plant is back in operation, and it was really nice to see it. Actually, it is performing better than it was before the upgrade.

Speaker #4: I mean, this is how it should be, but it's good to see that also in the financial numbers. The plant is performing better and also contributing to a payback of our investment here.

Speaker #4: So overall, good market situation in Poland, but then also our team in Poland are really using the conditions in the market to perform really well in that friendly environment.

Speaker #4: On page five, you're going to see the overview of the UK. And when you look at the registrations here, you can see we see a different trend line.

Speaker #4: So the registrations are coming down. Year on year, we're seeing a 6% decrease in registrations. So yeah, going in the wrong direction. Where is that coming from?

Jörg Brinkmann: The registrations are coming down. Year on year, we are seeing a 6% minus in registrations. Going in the wrong direction. Where is that coming from? There is still huge demand for housing, and housing is still on the political agenda. However, the demand is really constrained by affordability. Just in the last 4 months, we were seeing interest rates going up by 0.7%. For sure, this is having impact on buying decisions of people and families. This is certainly a watch-out area. There is new government in place. Always when there are these changes, there is a big uncertainty for investment decisions, and this is also what we can observe here. We are a little bit cautious here on what is going on in the UK market.

Speaker #4: There's still huge demand for housing, and housing is still on the political agenda. However, the demand is really constrained by affordability. Just in the last four months, we've seen interest rates go up by 0.7%.

Speaker #4: For sure, this is having an impact on the buying decisions of people and families. So this is certainly a watch-out area. And then, you know, there's a new government in place—always, when there's these changes...

Speaker #4: This is a big uncertainty for investment decisions, and this is also what we can observe here. So, we're a little bit cautious here on what's going on in the UK market.

Speaker #4: The good thing is, I think, there is a new government in place, and the new government, in their first speech, were talking about housing. And there's a £40 billion program for affordable and social housing.

Jörg Brinkmann: The good thing is, I think there is new government in place, and the new government in their first speech, were talking about housing, and there is a £40 billion program for affordable and social housing. They are targeting 200,000 additional social homes over 10 years. You can say, is that a lot? Is that not a lot? But given that the UK at the moment is only building 160,000 units, a 20,000 year on year plus would lead into 10%, 15% growth for the market, actually. If this initiative materializes, I think it would be good for the British society, for British economy, and then at the end also would be good for the industry and us. Let us see what the new government comes up with and if the funding holds.

Speaker #4: They're targeting 200,000 additional social homes over 10 years. You can say, is that a lot? Is that not a lot? But given that the UK at the moment is only building 160,000 units, a 20,000 year-on-year increase would lead to 10-15% growth for the market, actually.

Speaker #4: So if this initiative materializes, I think it would be good for British society, for the British economy, and then at the end, also would be good for the industry and us.

Speaker #4: So let's see what the new government comes up with, and if the funding holds. But I think it was a good sign that the new government talks about housing at the very beginning and makes this a priority.

Jörg Brinkmann: But I think it was a good sign that the new government talks about housing at the very beginning and makes this a priority. When you look at how we performed in this market environment, you can see in Q2, there was recovery over Q1, which is good for sure. Also, the weather here changed. But if you compare it against last year Q2, you see that it came in a little bit weaker. So we had less volumes, and there you can see that the dynamics, we are a little bit losing on these market dynamics, and this you can see from the revenue numbers. What I want to highlight here is the EBITDA margin we delivered in this context, and that is at 12%. So I think from a margin quality point of view, I think this is still a good result. How do we get there?

Speaker #4: When you look at how we performed in this market environment, you can see in Q2 there was recovery over Q1, which is good, for sure. Also, the weather here changed.

Speaker #4: But if you compare it against last year, Q2, you see that it came in a little bit weaker. So we had lower volumes, and there you can see that the dynamics—we are a little bit losing on these market dynamics—and this you can see from the revenue numbers.

Speaker #4: What I want to highlight here is the EBITDA margin we delivered in this context, and that is 12%. So I think, from a margin quality point of view, this is still a good result.

Speaker #4: How do we get there? Two major drivers, I would say. First of all, we are driving prices, because also here we have inflation to manage.

Jörg Brinkmann: Two major drivers, I would say. First of all, we are driving prices because also here we have inflation from energy. So prices we are driving. That is one contributor. The second one is that we have adjusted capacity to the new demand situation. Particularly, we have taken shifts out in 2 of our 3 plants in the UK, and that gets us into a better position and helps to protect our earning levels in the UK. From UK to CWE on page 6. Let me start with the market development first. Also here, when you look at the development of building permits, you can see a rising curve. Year on year, we see 17% more permits coming in in Germany, which is, first of all, an encouraging sign because that means there are investors and specific projects that are handed in into the authorities to ask for permission.

Speaker #4: So, prices—we are driving. That is one contributor. And then the second one is that we've adjusted capacity to the new demand situation. Particularly, we have taken shifts out in two of our three plants in the UK.

Speaker #4: And that gets us into a better position and helps to protect our earning levels in the UK. From UK to CWE on page six.

Speaker #4: Let me start with the market development first. Also here, when you look at the development of building permits, you can see a rising curve.

Speaker #4: Year-on-year, we see 17% more permits coming in in Germany, which is, first of all, an encouraging sign, because that means there are investors and specific projects that are handed in to the authorities to ask for permission.

Speaker #4: And that is, first of all, a positive sign. And that also shows that there is underlying demand and that the market is showing more activity again.

Jörg Brinkmann: That is, first of all, a positive sign, and that also shows that there is underlying demand and that the market is showing more activity again. What is important, though, that these permits are also transforming into building starts, and that is the big question mark at the moment because we do not see the starts picking up. For this year, the German outlook is 185,000 units in the residential sector. To give you a little bit perspective, this is the worst number since 2012. We have, for a long time, not seen a number below 200,000, and for sure this is something that needs to be improved. As I said, with the permits going up, there is a pipeline that is built, and when this is translating into starts, we are also going to see this number climbing up again. The permits is a good sign.

Speaker #4: What is important, though, is that these permits are also transforming into building starts. And that is the big question mark at the moment, because we don't see the starts picking up.

Speaker #4: For this year, the German outlook is 185,000 units in the residential sector. To give you a little bit of perspective, this is the worst number since 2012.

Speaker #4: So, we've for a long time not seen a number below 200,000. And for sure, this is something that needs to be improved. But as I said, with the permits going up, there's a pipeline that is built.

Speaker #4: And when this is translating into starts, we're also going to see this number climbing up again. So the permits are a good sign. The question is, when do these buildings start to be built?

Jörg Brinkmann: Question is when do these building start to be built. CWE is more than Germany. We also do business in Denmark and Netherlands, both markets showing some good improvement, some positive market dynamics. We are very happy with that. Then the Switzerland, very stable, I must say, throughout the cycle. Not a lot of cyclicality here, but very stable market development and also earnings contribution. When you look at how our company is performing here, you see the revenue in Q2, DKK 262 million. It is an improvement over the Q1, but then it is quite a flat development. This is what we have expected in the current market environment. The EBITDA margin came in at 3%. This is mainly driven by, also here, increase of prices. Then we have announced the effects from our restructuring and the structural changes we have done to the organization.

Speaker #4: CWE is more than Germany. Just so you know, we also do business in Denmark and the Netherlands. Both markets are showing some good improvement and some positive market dynamics.

Speaker #4: We are very happy with that. And then Switzerland is very stable, I must say, throughout the cycle. So, not a lot of cyclicality here, but very stable market development and also earnings contribution.

Speaker #4: When you look at how our company is performing here, you see the revenue in Q2: 262 million Danish kroner. So, it's an improvement over Q1, but then it's quite a flat development.

Speaker #4: But this is what we’ve expected in the current market environment. EBITDA margin came in at 3%. This is mainly driven by, also here, an increase of prices.

Speaker #4: And then we have announced the effects from our restructuring and the structural changes we've made to the organization. These effects are now materializing and helping to improve our earnings level here.

Jörg Brinkmann: These effects we are now seeing materializing and helping to improve our earnings level here. If I talk a little bit about strategic initiatives that we are driving as a group, I want to give you an update about this on page 7. Basically two major topics that we are driving. One is our operational performance of the plant. You have heard me talking about Home, which is our operating model for excellence. These are numbers I want to share with you here because we are quite happy to see that our 2025 plants that we are operating and the whole network is really improving, and we are really driving operational efficiency here. One key indicator we are looking at is the net hours of production per week.

Speaker #4: If I talk a little bit about the strategic initiatives that we are driving as a group, I want to give you an update about this on page seven.

Speaker #4: So basically, two major topics that we are driving. One is our operational performance of the plants. You have heard me talking about HOME, which is our operating model for excellence.

Speaker #4: And these are numbers I want to share with you here, because we are quite happy to see that our 20-25 plants that we are operating, and the whole network, are really improving.

Speaker #4: And we are really driving operational efficiency here. One key indicator we are looking at is the net hours of production per week. And as you can see here, we improved that nicely from a level of 117 in '24.

Jörg Brinkmann: As you can see here, we improved that nicely from a level of 117 in 2024, that is where we started, to a level of 135 in the H1 of this year. We had a record Q2 with 137 hours. There is significant improvements of the network and the efficiency of plants. This is part of the whole strategy we were driving over the last three years. We have closed a lot of plants, concentrated volumes into fewer plants, and now really driving efficiency. This is not the end of the story, but it is going in the right direction and certainly helping to protect our earnings. Also, the Puławy upgrade, as I said, it is nice to see that net hours are even better than they were before.

Speaker #4: That's where we started, to a level of 135 in the first half of this year. And we had a record Q2, with 137 hours.

Speaker #4: So, there is significant improvement in the network and the efficiency of plants. And this is part of the whole strategy we have been driving over the last three years.

Speaker #4: You know, we've closed a lot of plants, concentrated volumes into fewer plants, and are now really driving efficiency. This is not the end of the story, but it's going in the right direction.

Speaker #4: And certainly, helping to protect our earnings. Also, the PRAVI upgrade, as I said, is nice to see, and net hours are even better than they were before.

Speaker #4: And that is exactly what you want when you invest in plants and in bottlenecking—to see that after this investment, you have a better asset that is performing.

Jörg Brinkmann: That is exactly what you want when you invest into plants and into the bottlenecking to see that after this investment, you have a better asset that is performing. It is also needed, because it is close to our Warsaw market, which is very important to us. That is volume we need to serve the Warsaw area on big scale. This is Home. Germany is the big value creation area here for us. When you compare earnings levels, Poland and the UK, they are operating really on different levels. We have some work to do in Germany. What I can tell you is, we are seeing really some good traction from our new profit center approach. We have organized Germany in four profit centers, very regional businesses. We have leaders for all these four regions.

Speaker #4: And then that's also needed because it's close to our Warsaw market, which is very important to us. That is volume we need to serve the Warsaw area on a big scale.

Speaker #4: So, this is home. And then, for sure, Germany is the big value creation area here for us. When you compare earnings levels, Poland and the UK are operating really on different levels.

Speaker #4: We have some work to do in Germany. And what I can tell you is, we're seeing really good traction from our new profit center approach.

Speaker #4: We've organized Germany into four profit centers—very regional businesses. We have leaders for each of these four regions, and now we are really driving the top line and making sure that we are selling the right products to the right customers within these regions.

Jörg Brinkmann: Now we are really driving top line and making sure that we are selling the right products to the right customers within these regions. So a new setup, but we believe it is the right strategy. The key task here is to really align the demand side, so the sales side, and then the production side. We call it sweet spot, but that is what is really critical, making sure we have the right products, the right quantities, and then match that also with the capacity that we have installed within these regions. That is what we are driving in all these four profit centers. From that point of view, it is well on track. The savings from the restructuring, we have delivered that. We started that last year in the H2 of 2025.

Speaker #4: So, new setup, but we believe it's the right strategy. The key task here is to really align the demand side—the sales side—and then the production side.

Speaker #4: We call it the sweet spot, but that is what is really critical—making sure we have the right products, the right quantities, and then matching that also with the capacity that we've installed within these regions.

Speaker #4: And that is what we are driving in all these different, these four profit centers. So, from that point of view, it's well on track.

Speaker #4: Then the savings from the restructuring—we've delivered that. You know, we started that last year in the second half of 2025. So we're going to see, we see the full effect now materializing with the end of H1 this year.

Jörg Brinkmann: We see the full effect now materializing with the end of H1 this year. In total, we have delivered DKK 40 million of annualized savings on fixed costs. There were another DKK 30 million coming from lower impairments. Both numbers we see arriving into our P&L, which is what we wanted. It is good that we can tick that off. On top of that, from all the assets we have sold, I think we are making some good progress in utilizing them. We have sold a couple of them, and in total, we had net incomes here of DKK 49 million. They all materialized in Q2.

Speaker #4: And in total, we've delivered DKK 40 million of annualized savings on fixed costs. And then there was another DKK 30 million coming from lower impairments.

Speaker #4: Both numbers we see arriving into our P&L, which is what we wanted, and it's good that we can tick that off. On top of that, from all the assets we have sold, I think we're making some good progress in utilizing them.

Speaker #4: So, we've sold a couple of them. In total, we had net incomes here of DKK 49 million. They all materialized in the second quarter.

Speaker #4: And I think it is also good that we are utilizing these assets that we've closed down, and using the value of these assets to further optimize our cash position here and bring the debt position of the company down.

Jörg Brinkmann: I think this is also good that we are utilizing these assets that we have closed down and using the value of these assets to further optimize our cash position here and bring the debt position of the company down. We are going to do that also forward because there are still some assets that we are holding for sale. With that, let me turn the call over to Bjarne Pedersen, who will give you an even deeper insight on the financial numbers.

Speaker #4: And we're going to do that going forward as well, because there are still some assets that we are holding for sale. With that, let me turn the call over to Bjarne, who will give you an even deeper insight into the financial numbers.

Speaker #2: Yes, thanks for that, Jörg. And we do that on slide eight, where we start to look at how the top line has developed. We came into a much more normalized state in the second quarter.

Bjarne Pedersen: Yes. Thanks for that, Jörg. We do that on slide 8, where we start to look at how the top line has developed. We came into a much more normalized state in Q2. The revenue is up. That is mainly driven by the volumes. So we have a 4% volume growth quarter-on-quarter. That is driven by Poland, that saw a huge increase. Based on also what Jörg explained, UK did see a decrease, and where the CWE was more flattish. In general, when you look at the numbers for CWE, there is a lot of small moving parts, mainly going in the right direction, but it is not one big thing that is driving the improvement that you see in CWE. On the revenue side, you also see the big increase from the Polish volume being illustrated.

Speaker #2: The revenue is up. That is mainly driven by the volumes. So, we have a 4% volume growth quarter on quarter. That is driven by Poland.

Speaker #2: That's our huge increase. Based on also what Jörg explained, the UK did see a decrease, and whereas the CWE was more flat-ish. In general, when you look at the numbers for CWE, there are a lot of small moving parts, mainly going in the right direction, but it's not one big thing that is driving the improvement that you see in CWE.

Speaker #2: On the revenue side, you also see a big increase from the Polish volume being illustrated. That is the main driver for our organic growth of 6%.

Bjarne Pedersen: That is the main driver for our organic growth of 6%. That is very positive for the quarter. But bear in mind, for H1, we are still at -5% on the organic growth. On the prices, they are higher than last year, and the volumes are equally up. So that confirms that the underlying initiatives and market is playing in the right direction. One thing to notice is that it is Poland driving it. It has the numerical effect that it takes some of the averages down. So we have an adverse country mix effect. Because when you go from the local revenue into DKK, Poland is having lower prices than also a lower nominal DKK effect on that.

Speaker #2: That is very positive for the quarter. But bear in mind, for the first half, we are still at negative 5% on the organic growth.

Speaker #2: On the prices, they are higher than last year, and the volumes are equally up. So that confirms that the underlying initiatives and market are playing in the right direction.

Speaker #2: One thing to notice is that it is Poland driving it. It has the numerical effect that it takes some of the averages down. So, we have an adverse country mix effect, because when you go from the local revenue into DKK, Poland is having lower prices, and also a lower nominal DKK effect on that.

Speaker #2: If we go to slide number nine, we start to look into how the earnings development has been on this top line. On the left-hand side, you see the gross margin development.

Bjarne Pedersen: If we go to slide number 9, we start to look into how the earnings development has been on this top line, and on the left-hand side, we see the gross margin development. We are, so to speak, back in the region, which we think is what we can achieve under the current demand situation. We are at this 22% for the period. We have seen the past year fluctuate between 22% and 24% in, let us say, the normal seasons. We still have capacity available, so with a little bit more demand, we are also able to increase this further. The margins also confirm that we are able to pass through the energy cost. We have talked a little bit about the impact from rising energy cost and our hedging.

Speaker #2: We are, so to speak, back in the region, which we think is what we can achieve under the current demand situation. We are this 22 for the period.

Speaker #2: We've seen past years fluctuate between 22 and 24, in, let's say, the normal seasons. We still have more demand, and we are also able to increase this further.

Speaker #2: The margins also confirm that we are able to pass through the energy cost. We've talked a little bit about the impact from rising energy costs and our hedging.

Speaker #2: But with these margins, I think we prove that that is being delivered. Again, taking into account that there's a little bit of an adverse effect from the country mix.

Bjarne Pedersen: But with these margins, I think we proved that is being delivered, again, taking into account that it is a little bit adverse effect from the country mix. Also, as we are passing through the cost, we have got a higher top line. So again, mathematically, we have a little bit of headwind, but we can still maintain this headline number of the 22%, which we are pleased to do for the quarter. On the right-hand side, you see the breakdown of the earnings on EBITDA level, all in line with the volume and margin development. UK, more or less on par on lower volume, again, confirming the margin and the pass-through of the energy cost. Poland up, and so is CWE.

Speaker #2: And also, as we are passing through the cost, we got a higher top line. So, again, mathematically, we have a little bit of headwind, but we can still maintain this headline number of the 22, which we are pleased to do for the quarter.

Speaker #2: On the right-hand side, you see the breakdown of the earnings at EBITDA level, all in line with the volume and margin development. The UK is more or less on par, despite lower volume.

Speaker #2: Again, confirming the margin and the pass-through of the energy cost. Poland up. And so is CWE. CWE, again, this basket of the underlying initiatives, the effects from the restructuring cost last year, and then that our commercial approach has been changed and is seen to take us in the right direction.

Bjarne Pedersen: CWE, again, this basket of the underlying initiatives, the effects from the restructuring cost last year, and our commercial approach has been changed and are seeming to take us in the right direction. On slide number 10, we have an overview of the cash flow for the quarter. With the normalized earnings level for the quarter at the 85, together with some positive effect from net working capital, we get into this cash flow from operations of around DKK 100 million. On top of that, we then also have the cash flow from the asset sale, so the free cash flow is at DKK 117. That is also helping our gearing ratio, which has decreased from 4.1 down to 3.4 here at the end of the Q2.

Speaker #2: On slide number 10, we have an overview of the cash flow for the quarter. So, with the normalized earnings level for the quarter at 85, together with some positive effect from net working capital, we get into this cash flow from operations of around 100 million.

Speaker #2: And on top of that, we then also have the cash flow from the asset sales. So the free cash flow is at 117. That is also helping our gearing ratio, which has decreased from 4.1 down to 3.4 here at the end of the second quarter.

Speaker #2: If we then go to slide number 11, we have our outlook for the year. There is no update to the outlook itself. We have adjusted some of the key assumptions for it.

Bjarne Pedersen: If we then go to slide number 11, we have our outlook for the year. There is no update to the outlook itself. We have adjusted some of the key assumptions to it. On the market side, we see a stronger market in Puławy that we originally anticipated, and we see more uncertainty around the UK market. We have also slightly adjusted our expected CapEx spend. It has been low in the H1. It will increase in the H2, but now we expect it to be around DKK 100 million as a gross spending for the year. We can also confirm the free cash flow based on the current cash flow and the asset sale. We expect that to be positive for the full year. With that, I'll hand back to Jörg, who will summarize our findings.

Speaker #2: On the market side, we see a stronger market in Poland than we originally anticipated, and we see more uncertainty around the UK market.

Speaker #2: We have also slightly adjusted our expected CapEx spend. It has been low in the first half, but it will increase in the second half.

Speaker #2: But now we expect it to be around DKK 100 million as gross spending for the year. And then we can also confirm the free cash flow based on the current cash flow and the asset sale.

Speaker #2: We expect that to be positive for the full year. With that, I'll hand back to Jörg, who will summarize our findings.

Speaker #3: Yes. So, on page 12, let me try to really summarize the situation of the company. So, first of all, business is back to normal.

Jörg Brinkmann: Yes. On page 12, let me try to really summarize the situation of the company. First of all, business is back to normal. We are seeing the underlying performance of the business. After H1, we had break even, and we continue driving the business going forward. This is a good thing. Second, we talked about the UK. It's a watch-out area for us. We've adjusted and taken the adjustments that were needed. From that point of view, we have done the right decisions here, and we need to now monitor what this new government will do and how this is impacting housing. We are well-prepared for those scenarios. On Germany, we are seeing that the strategic changes we have done to the German organization, they are right, and they are working.

Speaker #3: That is, we are seeing the underlying performance of the business. After the first half, we had break-even, and we continued driving the business going forward.

Speaker #3: So, this is a good thing. Second, we talked about the UK. It's still a watchdog area for us. We have adjusted and taken the adjustments that were needed.

Speaker #3: So, from that point of view, we have made the right decisions here. And we need to now monitor what this new government will do and how this is impacting housing.

Speaker #3: We are well prepared for those scenarios. And then on Germany, we are seeing that the strategic changes we have made to the German organization are right.

Speaker #3: And they are working. And then with these permits that we are seeing going up, yeah, we are slightly positive, actually, that there could be some momentum coming from the German building activity and also helping support our earnings level in Germany going forward.

Jörg Brinkmann: With these permits that we are seeing going up, we are slightly positive, actually, that there could be some momentum coming from the German building activity and also helping support our earnings level in Germany going forward. For sure, we're going to stay focused on cash flow. This is one thing that Bjarne and I are driving, really making sure there's positive cash flow and that we are optimizing and improving our debt position. Overall, we maintain the outlook and going to deliver an EBIT of between DKK 50 million and DKK 100 million for this year. With that, let me open up the call for your questions.

Speaker #3: And then, for sure, we're going to stay focused on cash flow. This is one thing that Bjarne and I are driving—really making sure there's positive cash flow and that we are optimizing and improving our debt position.

Speaker #3: And overall, yeah, we maintain the outlook and are going to deliver an EBIT of between 50 and 100 million for this year. And with that, let me open up the call for your questions.

Speaker #1: Thank you. We'll now start the Q&A session. If you wish to ask a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again.

Operator: Thank you. We will now start the Q&A session. If you wish to ask a question, please press 5 star on your telephone keypad. To withdraw your question, you may do so by pressing 5 star again. There will be a brief pause while questions are being registered. As we have no questions in the queue, I will hand it back to the speakers for any closing remarks.

Speaker #1: There will be a brief pause while questions are being registered. As we have no questions in the queue, I will hand it back to the speakers for any closing remarks.

Speaker #2: No questions.

Jörg Brinkmann: No questions. Okay. No questions. It seems that our messages here were so clear. Anyway, thanks for dialing in. Thanks for your interest in the company. I know we are going to see some people in the next couple of days. Looking forward to that. With that, have a good day. Bye-bye.

Speaker #3: Okay, so no questions. It seems that our messages here were so clear. But anyway, thanks for dialing in. Thanks for your interest in the company.

Speaker #3: I know we're going to see some people in the next couple of days—looking forward to that. And with that, have a good day.

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Half Year 2026 H+H International AS Earnings Call

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