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CVR. mr APRGIPSIT
Erhvervsstyrelsen
14 apr. 2014
Annual Report
2013
H+H International A/S
Godkendt på ordinær generalforsamling
den 40. ap Ley
Build with ease
JAGENT'S REVIEW
The way forward
Key figures
Highlights
Our company
Strategy and long-term financial targets
Financial review and outlook for 2014
Production
Risk management
Corporate social responsibility
Corporate governance
Shareholder information
Board of Directors
Executive Board and organisation
FINATGCIAL STATEMENTS
30
Sal
32
34
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STÅ
TA
78
79
Ueterejsgfs tsar
Statement of comprehensive income
(Ella
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Seriel sae eat te STEEL ANG
Notes
Management statement
Independent auditors' reports
H+H addresses
OG 2014 H+H International A/S
BIN (NE SEER SGL ELSE EEN NNE ET UNS DTS TAN
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 3
The way forward
"Market conditions in 2013 turned out to be as difficult as we expected, but
we see positive development and growth in the years to come,"
2013
Despite a very hard winter across Europe and continued
European economic turmoil with weak growth in many
markets, our year-end EBITDA result was in line with our
guidance, although earnings were still not satisfactory. Only
in the UK did we see market growth in 2013. No segments
achieved their full potential, but when the markets turn and
demand rises again, we will be able to handle the increase in
volumes with our existing production capacity, thereby
increasing profitability.
We strengthened our sales organisation in 2013 and will
continue to optimise it through leadership, cross-border
sharing of best practices and other new initiatives, With these
efforts, we will be reaching for excellence in sales, including
addressing new segments and new customers with the aim of
achieving profitable growth.
We continued to implement our excellence programme, …
which has resulted in cost savings in production and has Kent Arentoft, Chairman.
improved our working capital which continuously will be an
important focus area.
Strategic plan 2014-2016
We have prepared a new strategic plan for 2014-2016 and named it "Creating value zhrough profitable growth”. Qur aim is
to improve earnings and to achieve a return on invested capital of minimum 10%.
We will be focusing on our core business of aircrete, increasing our market penetration and so strengthening our market
position. Through innovation, we aim to make aircrete a stroønger and more competitive product when compared with
other building materials. Our goal is for aircrete to be a natural ingredient in any building and for H+H to be the customer's
first choice.
Our brand is undergoing modernisation, bringing our image up to date and raising H+H's profile in both existing and new
business segments. '
Indicators for most of the markets in which we operate suggest economic growth in the coming years, but market visibility
remains limited. We are confident that when the markets normalise, H+H will reposition itself with increased revenue and
profitability due to the many efficient strategic and operational measures implemented.
Although our future strategy is now in place, much hard work still lies anhead of us. We are confident that our strong team
of skilled and committed employees will succeed in implementing the new strategic plan and in achieving our long-term
goals.
1410410EQGSN06264
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 4
Capital structure
H+H had a solvency ratio of 22.7% and net interest-bearing debt of DKK 532 million at the end of 2013. The Board of
Directors regularly evaluates the capital structure and is of the opinion that the company has adequate funding in place to
realise the new strategic plan, and that H+H should aim for maximum net interest-bearing debt of 2-3 times EBITDA at the
end of the strategy period in 2016.
Exclusive home built of solid blocks from H+H.
Dividend |
Given the loss after tax for 2013 and the uncertainty with respect to when and how quickly revenue and earnings will return
to stable growth, the Board of Directors will recommend at the annual general meeting on 10 April 2014 that no dividend
be paid for the 2013 financial year.
On behalf of the Board of Directors:
Kent Arentoft
Chairman
1410410EQGSN06265
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 5
Key figures
Group
(DKK '000) . 2013= 2012= 2011 2010 " 2009%=
Income statement
Revenue 1,260.1 1,223.6 1,309.8 1,185.5 1,068.0
Gross profit 2615 2723 2834 237,6 247.7
FEE ES EDER] eter amortisation 6 —— 1034 000925 8) 10
Operating profit (EBIT) 5,9 356 (9.4) (245,4) (205,3)
Net financing costs (42.5) (42.9) (50,3) (29.1) (58.3)
Loss before tax (36.6) (7.3) (59,8) (274,5) (263.5)
Loss for the year from continuing operations (40,1) (36.8) (75.8) (262,9) -
Loss for the year from discontinued operations (52,4) (45.5) (48.6) (7.6) -
Loss for the year (92.5) (82.4) (124.5) (270.5) (232.5)
Balance sheet
Non-current assets 962,4 1,0456 1,176.4 1,363.9 1,495.4
Current assets 330,5 343,8 407,5 294,9 359,6
Share capital 490.5 490.5 490.5 490.5 490,5
Equity —… 2939. 417.9 472,7 670.7 958.2
Non-current liabilities 750,1 746,5 840.0 818,5 749,5
Current liabilities 249.0 225.0 271.3 169,6 147.2
Total equity and liabilities 1,292.9 1,389.4 1,584.0 1,658.8 1,855.0
Investments in property, plant and equipment 35.5 24.0 36.9 35.2 104,6
Interest-bearing debt (net) "5316 538.66 628.5 613,6 595.8
Cash flow
Cash flow from operating activities …— 582 44,4 42.9 46.4 (41.7)
Cash flow from investing activities (30.1) 104,1 (32.2) (31.8) (119.4)
Free cash fiow 28.1 148.5 10.8 14.6 (161.1)
Financial ratios
Gross margin 20.8% 22.3% 21.6% 20.0% 23.2%
Operating margin (EBIT margin) 0.5% 2.9% (0.7%) (20.7%) (19.2%)
Return on invested capital (ROIC) 0.7% 3.8% (0.7%) (16.2%) (7.2%)
Return on equity (26.0) (18.5%) (19.5%) (33.2%) (27.3%)
Solvency ratio 227%. 30.1% 29,8% 40,4% 51.7%
Net interest-bearing debt/EBITDA 5,7 5.2 6.8 (127.8) 595.8
Share and dividend figures
Average number of shares outstanding . 9,789,511 9,789,511 9,789,511 9,789,511 1,432,844
Adjusted average number of shares outstanding 9,789,511 9,789,511 9,789,511 9,789,511 2,457,792
Share price, year-end (DKK) 47.7 26.0 424 53.0 63.0
Book value per share, year-end (DKK) 30 43 56 68 98
Price/book value ' 16 0.6 0.8 0.8 0.6
Price-earnings ratio (PE) (5.0) (31) (33) (1.9) 0.7
Earnings per share (adjusted) (9.5) (84) (12.7) (27.6) (94.6)
Diluted earnings per share (adjusted) (9.5) ' (8.4) (12.7) (27.6) (94.6)
Dividend per share (adjusted) ” 0» o 0 0 0
Staff ' .
Average fuli-time staff … 885 1,001 1,084 1,156 1,238
= Figures have been adjusted for discontinued operations.
2% Figures for 2010 and 2009 have further been adjusted for the transition to IAS 19R (2011) where impact on the income statement is concerned.
Earnings per share and diluted earnings per share have been calculated in accordance with IAS 33 (note 12).
The other financial ratios have been calculated in accordance with the Danish Society of Financial Analysts' "Recommendations & Ratios 2010".
1410410E0GSN06266
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW
Highlights
=…… Revenue of DKK 1,260 million and organic growth of 10%.
<= EBITDA of DKK 94 million in line with our guidance.
=…… Free cash flow of DKK 28 million in line with our upgraded guidance.
=… Qur excellence programme was again successful and has resulted in average annual savings in production over the
last three years of around DKK 20 million.
=…… To improve earnings, the factory in Finland was closed in April 2013, and it was decided to shut down production
Temporarily at the factory in Skawina, Poland.
<=. Xella was denied permission to merge with H+H in the German market.
…… Thenew organisation was fully implemented, and a new strategic plan is in place: Creating value through profitable
ETOWER.
=…… Outlook for 2014: Organic revenue growth is expected to be in the region of 3-6%. EBITDA is expected to be in the
region of DKK 110-130 million. Investments are expected to be in the region of DKK 60 million.
Single-family home built of solid blocks from H+H.
1410410E0GSN06267
6
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 7
Our company
"Our one-company approach is key to safeguarding and growing our market
position"
Michael Troensegaard Andersen, CEC
BUILD WITH EASE
H+H can trace its roots back to 1909, when it was
founded in Denmark to mine sand and gravel, and was
one of the pioneers in the manufacture of aircrete, which
it started in 1937. Today we develop, produce, sell and
distribute aircrete products and solutions primarily for
walls in residential, industrial and other non-residential
buildings.
H+H has built a very strong market position and is today
Europe's second-largest aircrete supplier.
Construction techniques may vary greatly from country
to country, but our expertise does not, and changing
long-standing building traditions takes vision and Innovative solutions
innovative thinking. en SEE ENE ERNE
H+H offers a wide range of services and solutions to
ensure a high level of customer satisfaction. Our Build
With ease value proposition has been incorporated across
our sales organisation and is a strong communicator of
how we work and where we focus our efforts. Build with easesets the overall standard for how we work as ateam with our
customers.
OUR MARKETS
H+H operates in a number of countries in Western and Eastern Europe.
H+H's activities in Western Europe cover the Benelux countries, Denmark, Finland, Germany, Sweden and the UK. Demand
in the UK market will be favoured in the longer term by demographic pressure from new households. In the medium term,
demand will be boosted by a number of government programmes designed to stimulate the construction of new homes. In
Germany, we have seen increasing building activity, with the fastest growth in the high-rise segment. In Denmark and
Sweden, construction activity reached its lowest levels since the start of the economic crisis but is believed to have
bottomed out.
Our activities in Eastern Europe cover Poland and Northwest Russia. Poland is the biggest aircrete market in Europe, but
activity levels have dropped significantly in recent years due to the market economic slowdown. Fierce competition and
extensive overcapacity put pressure on prices. The market in Northwest Russia remains volatile, with low visibility, but our
underlying long-term positive growth expectations are intact.
In general, 2013 was characterised by widespread uncertainty and rapidly changing market conditions. The OECD
forecasts economic growth in our markets of around 2% in 2014.
One general market trend is an increased focus on urbanisation. This includes the production of high-rise apartment
buildings and single-family homes around the larger cities. Another general trend is a continued strong focus on
environmental and energy considerations.
1410410EQ0GSN06268
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 8
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OUR CUSTOMERS
Our strongest customer groups are builders' merchants and residential developers. We will continue to work closely with
them to offer the best possible solutions at the best possible prices and with the best possible products. Only through our
joint success will we be able to increase our market share and sales.
Residential
developers
Builders'
(rele at ta rES
All customer groups have been affected by the economic turmoil of recent years, and activity and investments have been
lower than normal. We are convinced that construction activity will pick up again as the economy recovers, increasing
sales from current levels.
We meet our customers with our one-company approach, utilising best practice within sales and marketing. To strengthen
our sales efforts, we will invest further in cross-border sharing of best practices, training and harmonisation of
methodologies. This willbe a strong tool for our sales force in its daily work in a competitive market and ensure that our
strategic objectives are realised.
141041QEQGSN06269 .
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 9
H+H meets challenges by evaluating the possible consequences on an individual basis, and reacts to unforeseen market
challenges to safeguard our market position. We constantly monitor economic and political developments and
competitors in the markets in which we operate.
OUR PEOPLE
H+H International A/S in Denmark is the parent company of the H+H Group, which consists of nine active companies
operating in nine countries and has a total of around 900 competent and committed employees. Essentially, it is people
who create value, not machinery.
H+H is functionally organised to enable best practice sharing across operations, and a strong team approach across the
functions ensures local coordination in our individual geographical markets. We must have skilled people at all levels of our
organisation, and we will striveto ensure that we have the necessary training programmes in place. We will continue to
develop our organisation to the highest competitive level with a team of people who have a clear winning attitude and the
strongest commitment.
Coming out of the autoclave the aircrete products are cooled and are packed ready for transport.
1410410E0GSW06270
ANNUAL REPORT 2013 |] MANAGEMENT'S REVIEW 10
Strategy and long-term financial targets
"Creating value through profitable growth is the foundation for our new
strategic plan. We are focusing sharply on optimising our business and on
new initiatives to make us the overall number one aircrete supplier in our
chosen geographical markets,"
Following a long economic crisis, we are starting to see small
signs of recovery in our European markets. Successful
execution of our strategic plan for 2014-2016 will lead to a
stronger H+H with an improved debt ratio and an enhanced
market position.
t
i
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i
Our focus is on obtaining a reasonable return on invested
capital that exceeds our cost of invested capital.
We aim to consolidate H+H's position as one of the leading
global aircrete suppliers and become the overall number one
within our chosen geographical footprint in terms of size,
profit and market share.
We aim to have the highest growth rate of the main
competitors in the market and to exceed the underlying
market growth rate.
We are adopting a one-company approach for improved
Michael Troensegaard Andersen, CEO. profitability, realising synergies and sharing best practices
across our organisational entities.
Focusing on our core competences, we are determined to offer the most attractive aircrete solutions in general and to
seek increased penetration of fast-growing construction market segments.
The strategic plan contains a number of key initiatives, which will be funded by our own cash flow and within the scope of
our current credit facilities. ”
THE THREE CORE ELEMENTS OF OUR STRATEGIC PLAN
One-company approach
H+H is adopting a one-company approach to deliver the most shareholder value. One of the key measures for the value of
the one-company approach is scalability — our ability to create revenue growth without a similar increase in fixed costs.
H+H will continue to harvest synergies from operations, sales and marketing to increase shareholder value. The benefits of
the one-company approach far exceed the cost of running H+H as one group.
H+H's strong position in the main European markets is a major advantage over most competitors, which are active in one
country only. Our cross-border position offers scale advantages as well as opportunities to share best practices.
H+H continues to build its pan-European brand, and our value proposition Build with easeis ensuring a strong,
homogeneous and value-added service for our local and international customers.
141041QEO0GSN06271
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW nm
Through functional cross-border organisation of ' . .
Sales and Marketing as well as Operations, we have VISION MISSION
launched, and will be launching, a number of
- To be number one aircrete supplier To supply value-added innovative
programmes to increase market share and PP PPY
in our geographical fogtprint. aircrete solutions to buildings
profitability. . through profitable parinerships
with distributors. contractors and
Within Sales, we will be sharing best practices across housebuilders.
borders and developing joint sales training concepts.
Using common definitions of market and customer
segments, we are identifying the most lucrative focus
areas and steering the organisation in that direction.
Plant utilisation remains a focus area and a key driver Sl: Company
of profitability. Through structural change and
volume growth, H+H has met its original overall
target for plant utilisation of above 75%.
Through our excellence programme, including
sharing best practice across all plants, we are
' constantly looking to improve our production
efficiency.
The programme will continue in the coming years,
and the focus will be on achieving similar annual
savings. At the same time, the programme will target
further increases in plant utilisation to increase
available plant output.
Our target in the planning period will be for cost increases to be below general inflation, and for us to be able to absorb the
planned volume growth within the current infrastructure,
Attractive aircrete solutions
Building traditions and methods differ from country to country, and H+H has successfully been able to adapt and develop
solutions for local markets.
Our Build with ease value proposition will continue to drive our development of value-added solutions.
We will focus on further strengthening and supporting both local innovation and more group-wide set-ups.
Product innovation will be essential to meet the growing interest in environmentally friendly and energy-saving products,
while also enabling penetration of new or less-developed segmenis.
H+H is the only cross-border player in Europe specialising solely in aircrete. Compared with our competitors, we are
Tocused and/or have a large enough market to achieve economies of scale for centrally driven innovation activities.
Our focus will be on improving environmental properties and on developing powerful solutions to increase penetration in
higher-growth segments such as residential high-rises and non-residential buildings.
1410410E0GSN06272
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 12
Highest growth rate
We continue to strengthen our market position as the number two in Europe, and our long-term goal is to become the
overall number one aircrete supplier in our chosen geographical footprint.
Our large market share in growth markets such as the UK and Northwest Russia with little or no presence from our main
competitor is helping us, and at the same time we have successfully managed to gain market share from other wall-
building materials.
However, to reach our long-term objective, it is mandatory that we achieve a higher growth rate than our competitors and
exceed the general market growth rate.
LONG-TERM FINANCIAL TARGETS
TTT nge … En
arsen
er eee)
1410Q410E0GSN06273
ANNUAL REPORT 2013 |] MANAGEMENT'S REVIEW 13
Financial review and outlook for 2014
"We achieved results that were in line
with our guidance for EBITDA and
cash flow. We used 2013 to optimise
our business processes. "
INCOME STATEMENT
Revenue
Revenue was DKK 1,260 million, against DKK 1,224 million in
2012, an increase of DKK 36 million or 3.0%. There was
organic growth of 10.0%. Expressed in local currency,
revenue was up 5.6% on last year. GBP and RUB exchange
rates had a negative effect on revenue of DKK 31.4 million,
while EUR and SEK exchange rates had a positive effect of
DKK 0.6 million.
Production costs
Average production costs were slightly lower than in 2012.
Price rises for raw materials, primarily energy, and transport Niels Eldrup Meidabl, CFO.
were as expected. Higher sales activity increased capacity
utilisation at a number of factories, which together with
savings due to production improvements through the excellence programme fully offset the higher raw material costs.
A wide range of cost savings were made in 2013 as part of the excellence programme. Savings in production were at a
higher level than in 2012. Average annual savings over the last three years have been around DKK 20 million.
Gross profit
The overall gross margin in 2013 was 20.8%, against 22.3% in 2012. Average selling prices were slightly below last year.
Special items
The results for 2013 include net negative special items of DKK 1.6 million, consisting of lawyers' fees, costs for
implementing the final phase of the new organisation and costs connected to the temporary shutdown of a factory in
Poland, almost fully offset by the profit from sales of unused production equipment.
The results for 2012 included net negative special items of.DKK 6.0 million, mainly costs relating to the implementation of
the new organisation and costs for advisers etc. in connection with the sale of H+H Geskå republika s.r.o.
DKKm DKKm
Revenue Gross profit
1.400 300 25%
1.200 F oe 20%
1.000 200 4 > 15%
800 400 — . 10%
600 ! 5%
400 - : T T T T 0%
200 2009 2010 2011 2012 2013
2009 2010 2011 2012 2013 BENRER Gross profit: —4— Gross margin
1410410E0GSN06274
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 14
EBITDA
EBITDA was DKK 93.6 million, against DKK 103,4 million in 2012. Earnings in H+H Geskå and profit from the sale of H+H
Ceskå in 2012 impacted earnings by DKK 10.4 million. Excluding H+H Geskå, the figure would have been DKK 93.0 million
in 2012. ' '
Operating profit (EBIT)
H+H made an operating profit of DKK 5.9 million in 2013, against DKK 35.6 million in 2012, down. DKK 29.7 million.
Adjusted for the write-downs in 2012 mentioned below, operating profit increased by DKK 4.3 million.
In 2012 previous write-downs of DKK 104 million in Russia were reversed due to improved market conditions, while real
estate in the Czech Republic was written down by DKK 46 million in connection with the sale of H+H Geskå, and goodwill in
Poland was written down by DKK 24 million as a result of market conditions remaining difficult, resulting in anet gain of
DKK 34 million.
Loss before tax from continuing operations
H+H recorded a loss before tax of DKK 36.6 million, against a loss of DKK 7.3 million in 2012, down DKK 29.3 million.
Taxation
The tax figure for the year was a negative DKK 3.5 million, against a negative DKK 29.6 million in 2012.
Closedown of the factory in Finland and temporary shutdown of a factory in Poland
As announced in the interim report for the first quarter of 2013, it was decided to close H+H Finland Oy's factory in
Ikaalinen, and production ceased in April. The Finnish operation has therefore been reclassified as discontinued in H+H's
financial reporting. Discontinued operations generated a loss of DKK 52.4 million in 2013, against a loss of DKK 45.5
million in 2012.
To further improve earnings, H+H decided to shut down production temporarily at the factory in Skawina, Poland. There
has been excess capacity in the Polish market in recent years, resulting in stiff price competition and low capacity
utilisation at Polish production facilities. With this shutdown, H+H aims to help reduce this excess capacity and increase
capacity utilisation at the company's other Polish production facilities. The change resulted in severance costs in 2013,
recognised under special items.
Western Europe
Revenue in Western Europe was DKK 936 million, an increase of DKK 76 million or 8.8% on 2012. Expressed in local
currency, revenue was up 11.5% on 2012.
Revenue was markedly higher in the UK and was also up in Germany and the Benelux countries, but lower in Denmark and
Sweden.
DKKm DKKm
EBITDA EBIT
120 10% 100 5%
100 8% — . 0%
80 6% - - c - —«. i
60 6 2009 po10 011 2012 2013 jf -5%
40 4% 100 4 ; -10%
20 2% rv : / | 15%
-200 <<. >
- 0% | z - -20%
-20 2% 300 25%
mme EBITDA ——2—— EBITDA margin ” mee EBIT —4— EBIT margin ?
1410410E0GSN06275
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 15
Government initiatives in particular stimulated the UK market, contributing to a more general improvement. H+H's market
share in the UK increased, due primarily to consolidation in the homebuilder market, where H+H's customers improved
their market share. There are clear signs of a recovery in construction activity in the UK.
In Germany, the first quarter brought very poor weather conditions, which led to unwanted stocks at competitors and
strong price competition. In consequence, average selling prices in 2013 dropped below 2012 levels in spite of higher
market activity.
Construction activity in the other Western European markets remains low relative to previous years. There has been a
sharp fall in construction activity in Sweden relative to 2012. '
EBITDA was DKK 67.4 million, against DKK 92.5 million in 2012. The decrease was due to lower export sales to Africa and
price pressure in Germany and Scandinavia.
Loss before tax of DKK 11.0 million, against a profit of DKK 13.6 million in 2012, a decrease of DKK 24.6 million.
Eastern Europe
Revenue in Eastern Europe was DKK 324 million, a decrease of DKK 39.6 million or 10.9% on 2012, However, there was
organic growth of 5.9%.
Sales volumes in Russia in 2013 were on a par with 2012, whereas revenue was up more than 10% due to price increases.
During 2013 the market slowed down periodically before picking up again. Visibility in the market remains very poor.
In Poland, demand remained low, and the high number of competitors and significant overcapacity led to a continued price
war between local producers in particular, which affected the general level of prices.
EBITDA was DKK 35.7 million, against DKK 36.8 million in 2012, There were improvements in both Russia and Poland. The
downward trend seen in Poland in recent quarters seems to have come to an end. The 2012 figure was impacted by
earnings in H+H Geskå of DKK 4.7 million.
Loss before tax of DKK 15.4 million, against a profit of DKK 4.7 million in 2012, a decrease of DKK 20.1 million. The 2012
figure includes write-downs of assets in the Czech Republic of DKK 46 million and reversal of previous write-downs in
Russia of DKK 104 million.
BALANCE SHEET
The balance sheet total at 31 December 2013 was DKK 1,293 million, against DKK 1,389 million at year-end 2012.
DKKm Revenue Western Europe | pkKm Revenue Eastern Europe
1.000 500
800 400
600 300 —
400 200 4+—
200 100 —
- old, ;
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
1410410E0GSN06276
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 16
Sale of assets
In July 2013 H+H entered into an agreement with CEMEX Kies & Splitt GmbH under which the latter took over the
extraction rights of raw materials from H+H's sand pit in Northern Germany. The agreement means that H+H will be paid a
total of DKK 40 million over the next 12 years for the extraction of materials from the pit. The agreement had a positive
impact on EBITDA in 2013 of DKK 3.5 million.
In January 2013 we sold the unused production equipment in the UK. The selling price for this equipment was DKK 5.5
million. The sale had a positive impact on earnings of DKK 3.7 million.
Investments
Total investments of DKK 35.9 million were made during 2013, against DKK 24.7 million in 2012.
Financing
Net interest-bearing debt totalled DKK 532 million at the end of 2013, down DKK 7 million since the beginning of the year
due to improvements in working capital. Negotiations are in progress on a new bank agreement to replace the current one
before it expires in February 2015.
The ratio of net working capital to sales improved from 9% on 31 December 2012 to 7% on 31 December 2013.
Financing costs totalled DKK 42.8 million in 2013, against DKK 44,5 million in 2012.
Cash flow
Free cash flow from continuing operations was DKK 28.1 million, against DKK 148,5 million in 2012. This was in line with
our upgraded guidance for free cash flow for 2013 in the region of DKK 20 million. Cash flow from discontinued operations
was negative DKK 28.8 million, due mainly to the closedown of the factory and finalisation of house-building projects in
Finland.
Equity
Equity fell by DKK 124 million in 2013. The loss after tax for the year decreased equity by DKK 92.5 million, while foreign
exchange adjustments of investments in subsidiaries reduced equity by DKK 27.0 million.
Events after the balance sheet date
A plot of land in the United Kingdom was disposed of after the end of the financial year at a carrying amount of DKK 9
million. No other significant events have occurred after the balance sheet date.
The current political situation in Ukraine and Russia may have a negative impact on our business in Russia, for example as
a result of possible fluctuation in the RUB exchange rate or higher energy costs.
DKKm Free cash flow DKKm Equity
200 1.200 60%
150 1.000 50%
100 800 40%
50 600 30%
2 400 20%
-50 200 10%
-100 - 0%
450 2009 2010 2011 2012 2013
-200 . .
2009 2010 2011 2012 2013 ER Equity —4— Solvency ratio
1410410EO0GSN06277
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 17
OTHER
Interest in taking over H+H International A/S
In 2013 Xella International Holdings S.å.r.l. was denied permission for a possible merger with H+H International A/S in the
German market. For more details, please refer to our company announcements in 2011-2013 on www.Hplusi.com.
OUTLOOK FOR 2014
=…… Organic revenue growth is expected to be in the region of 3-6%.
<=. EBITDA is expected to be in the region of DKK 110-130 million.
=… Investments are expected to be in the region of DKK 60 million.
These expectations for H+H's financial performance in 2014 are based partly on the following specific assumptions:
=…… Economic growth of around 2% in our geographical footprint.
=…… The operational excellence programme continues and reduces production costs further.
=…… Exchange rates, primarily for GBP, EUR, PLN and RUB, hold at their mid-March 2014 levels, which in the case of RUB
is a lower level than in 2013.
=… Energy and raw material prices rise only in line with inflation from their mid-March 2014 levels.
<…… The current political situation in Russia and Ukraine does not result in changed market conditions in Russia.
ABOUT THE OUTLOOK FOR 2014
The expectations for H+H's financial performance are based on a number of general assumptions.
Management believes that the most significant assumptions underlying H+H's expectations relate to:
"…… Sales volumes and product mix
=… Price competition in many of H+H's geographical markets
==. Developments in the market for building materials
= Distribution factors
=…… Weather conditions
H+H International A/S will update and adjust the expectations presented where so required by Danish legislation,
including the Danish Securities Trading Act, or the rules for issuers on NASDAQ OMX Copenhagen.
BDISCLAME
; This annual report contains forward-looking statements.
i Such statements are subject to risks and uncertainties, as various factors, many of which are beyond the control of
; H+H International A/S, may cause actual developments and results to differ materially from the expectations
i expressed in the annual report, '
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 18
Production
"The operational excellence programme makes us a strong competitor ina
challenging market, We will continue this important work and maintain our
focus on product innovation in the years ahead.”
Production facilities
H+H produces aircrete at 11 factories in Germany, Poland,
Russia and the UK with a total output of more than 2.5 million
cubic metres of aircrete per year. In 2005-2010 we invested
more than DKK 1 billion in upgrading and establishing new
production facilities, but in recent years we have limited our
investments to DKK 25-40 million per year.
Organisation
In 2013 a new organisational structure was implemented,
moving the Group from a national structure to a functional
structure with a Chief Operating Officer responsible for the
global supply chain.
The Group's competitive advantages have been enhanced
through:
ag kann -
==. Harvesting operational synergies Helen SØ …
"… Efficient transfer of best practices Bjørn Rici Andersen, Chief Operating Officer.
Simplification and uniformity of product portfolio
Optimal production allocation and improved capacity
utilisation
Streamlining of operational policies
Uniform performance management system
Focus areas going forward:
Health & safety management
Health & safety (H&S) management is a top priority for
our operations team. In 2013 we implemented several
initiatives to improve the safety culture in our factories,
including the introduction of a group safety officer
function, clear reporting and follow-up of any lost-time
accident, implementation of new H&S policies, and
making management's commitment to H&S visible in the
organisation. The H&S journey has not yet ended, but
2013 was used to lay out the basics to ensure successful
implementation of a proactive H&S culture throughout
the organisation.
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 19
Operational excellence programme
Launched in 2011, our very successful operational excellence programme focuses on improving H+H's competitive
position through reductions in production costs. The programme has three paris:
=…… Improving production and energy efficiency
==. Maximising purchasing power by bundling raw materials throughout the Group where beneficial
"…… Exchanging best practices across the Group
These initiatives brought average annual savings of DKK 20 million in 2011-2013. Going forward, we will continue the
operational excellence programme and aim at annual savings of around 2% of total production costs.
Supply chain platform
In order to ensure a profitable business, we have been adjusting to the current somewhat unstable market conditions by
paying close attention to the performance and potential of our production facilities and making any necessary changes.
In 2013 H+H planned to embark on an investment of DKK 40 million to increase significantly the capacity of the factory in
Kikerino, Russia. However, detailed analysis and a focused effort to increase capacity utilisation have made it possible to
limit the scope of the investment while still achieving a significant increase in annual output.
One of our five factories in Poland, the factory in Skawina, was temporarily closed down at the end of 2013 until the local
market improves to the extent that production cannot be handled at one of the other Polish factories. We have also
permanently closed down H+H Finland Oy's factory in Ikaalinen, with production ceasing in April 2013. It was concluded
that these facilities would not be capable of meeting the Group's strategic goals for market positioning and production
capacity within a reasonable time frame.
Product innovation
Through innovation we aim to make aircrete a stronger and more competitive product when compared with other building
materials, and to make our products competitive with products supplied by our peers in our geographical markets.
H+H has a history of supplying innovative products and solutions to the aircrete market. However, to ensure our continued
competitiveness and to be able to satisfy the demand from changing social and demographic trends in our markets, such
as the ever increasing demand for environmentally sustainable solutions, H+H has intensified the focus on cross-border
sharing of ideas and best practices and the generation of innovative new products and solutions.
We are in the process of developing a structured, common platform for sharing ideas across geographical markets and
generating innovative new solutions, with the purpose of fully realising our intellectual and economic potential. The
platform will ensure that ideas are shared systematically to address cross-border product and solution needs.
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 20
Risk management
Risk management is an ongoing process at H+H involving the identification of risks and an assessment of their potential
impact on earnings. We aim to mitigate identified risks through internal business procedures, insurance and/or follow-up.
Procedures, guidelines and various control systems have been developed to monitor and mitigate the risks identified,
ensuring optimal management of all key risks.
H+H uses long-term scenarios as part of an annual evaluation of opportunities for and barriers to future growth,
conducted during the strategy process. The scenarios are used to evaluate the Impact of major decisions and the potential
impact of major risks.
The Board of Directors has ultimate responsibility for the Group's risk management process and establishes the overall
framework for it, whereas the duty of monitoring compliance with policies has been delegated to the CFO.
free
Scenario Probability factor
Market With significant operationalgearing — High. High
and fixed costs, demand has a
noticeable effect on H+H's financial
performance. Developments in the
global economy and especially the
construction sector, as well as
political initiatives such as taxes or
tax deductions targeting the building
industry or home owners, or
changes to the mortgage system,
have a significant direct and indirect
impact on H+H.
Production A major production breakdown or Low Medium/
fire in a factory could cause a long- high
term loss of production. This
shortfall would have an effect on
sales unless made up by the other
factories.
Raw materials Production is dependent on the High " Medium
& energy supply of raw materials in order to
perform and fulfil orders. Production
costs are exposed to the effects of
higher energy prices on the cost of
transportation and price changes for
cement, sand and lime.
Monitoring economic and political
developments in the various
markets and effective sales
follow-up on a weekly basis.
Plans are in place to limit the time
to fix production issues, Business
interruption due to natural
disasters/fire/exptlosions etc. is
covered by insurance, which
includes the additional cost of
servicing the market from other
sourcing options.
All critical raw materials have dual
sourcing, and substitution of
suppliers can be implemented
relatively easily (although at a
cost). The cost of energy
consumption in production
corresponds to 5-10% of revenue,
so we monitor prices closely.
1410410QE0GSN06281
Scenario
ANNUAL REPORT 2013 [ MANAGEMENT'S REVIEW 21
Impact
factor
Action
Competition
& pricing
Financial &
foreign
exchange
Capital structure
& cash flow
H+H is the second-largest player in
the European market. This market
position could be endangered by
mergers between other suppliers.
Excess production capacity in some
markets could result in a price war.
H+H's earnings are primarily in RUB,
GBP and EUR, while its borfowings
are primarily in GBP, PLN, EUR and
DKK. Any developmenits in the
financial markets, especially in RUB
and GBP, could have a negative
impact on the financial results of
H+H.
Net interest-bearing debt amounted
to DKK 532 million at the end of
2013, and H+H wiliremain
dependent on external financing in
the future, The current agreement
on a credit facility of DKK 700
million expires in February 2015, The
bank can terminate the facility
prematurely if H+H fails to meet
certain financial covenants. In 2013
there was no breach of the financial
covenants.
Probability
Low
High
Low
Medium
Medium/
high
High
Competitor monitoring to the
extent possible, Strong market
visibility to maintain market
position. Price monitoring in the
various markets on a weekly basis
with possible price adjustments.
Exchange rate and interest rate
risks are mitigated under
established policies and are
subject to ongoing follow-up and
reporting.
Negotiations are in progress on a
new bank agreement to replace
the current one before it expires in
February 2015.
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 22
Corporate social responsibility
CORPORATE SOCIAL RESPONSIBILITY (CSR)
H+H develops, manufactures and sells aircrete products for the building industry in Western and Eastern Europe and
strives to do so sustainably from a commercial, health & safety and environmental perspective. This goal of doing business
in a sustainable way is an integral part of all of H+H's activities.
Aircrete is a particularly eco-friendly building material, not only because of its excellent thermal insulation properties but
also because the production of aircrete is easy on the environment, and at the end of its life cycle aircrete can be crushed
and used for other purposes, such as road fill and cat litter. The primary materials used in the production of aircrete are
cement, lime and sand, all of which are based on abundantly available natural resources. In some countries, PFA
(pulverised fuel ash, a residual product from power generation at coal-fired power stations) is used as a raw material
instead of sand.
CSR policies .
Up until 2011 H+H executed its business on the basis of unwritten CSR-oriented principles rather than formal written CSR
group policies. In addition CSR-related policies and actions were implemented locally in the various H+H subsidiaries on
the basis of local legislation, trends and traditions. The development and updating of group-based CSR policies was
initiated in 2011, but there are still relevant CSR issues for which group-based policies have not yet been developed. it is
the intention to establish a structured compliance organisation in the H+H Group during 2014, and a more complete group
CSR policy structure is expected to be in place by the end of 2016 when the current strategy period ends.
Ås one of its guiding principles, H+H is to work actively to reduce the environmental impact of its manufacture of aircrete,
and H+H's production and products are always to comply with applicable requirements and standards. Therefore, H+H
continuously seeks to develop its production processes, products and business practices in ways that can increase the
sustalnability of its production, logistics and products.
Furthermore, H+H is to be a safe place to work and is always to comply with statutory health & safety requirements
wherever it does business. H+H is to be an attractive place to work, offering scope for professional development and a
good work-life balance.
Another guiding principle for H+H's strategy and business activities is the recognition of human rights, including but not
limited to the freedom of organisation and equal opportunities regardless of gender, religion, colour, ethnic or national
origin and political convictions, as well as a ban on child labour and forced labour.
CSR statement for 2013
Pursuant to section 99a of the Danish Financial Statements Act, H+H International! A/S publishes an annual statement on
its CSR policies, actions taken to implement these policies and the results of these actions. The 2013 statement forms part
of Management's review and can be found on the company's website at www.HplusH .com/csr-statement,
1410410EQ0GSN06283
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 23
Corporate governance
RECOMMENDATIONS ON CORPORATE GOVERNANCE
Ås a company listed on NASDAQ OMX Copenhagen, H+H International A/S is subject to its Æu/es for issuers of shares,
including an obligation either to comply with the Æecommendations on Corporate Governance issued by the Danish
Committee on Corporate Governance or to explain why not and describe any alternative implemented instead. The
recommendations as last revised in May 2013 are available on the Committee's website, www.corporategovernance.dk,
In accordance with the recommendations, H+H International A/S has prepared a report on the company's compliance
with the recommendations in 2013, The report forms part of the company's Sfatuzory annual corporate governance
statement under section 107b of the Danish Financial Staternents Act, which can be viewed on the company's website at
www.HplusH.com/governance-staternent. H+H International A/S essentially complies with the recommendations, and in
the few instances of non-compliance, the reason for the non-compliance and a description of what is done instead are
provided in the above corporate governance statement for 2013.
Evaluation of the Board of Directors
The Board of Directors held nine meetings in 2013, while the Audit Committee held four, the Nomination Committee held
one and the Remuneration Committee three.
The Board of Directors has undertaken a self-evaluation based on input from one-on-one sessions between the Chairman
and each member of the Board of Directors and the Executive Board. The input from and issues raised during the one-on-
one sessions were subsequently discussed by the Board of Directors and considered in the light of, among other things,
the Board of Directors" competence and diversity profile published on the company's website www. HplusH.com and used
together with recommendations from the Nomination Committee to decide who the Board of Directors will nominate as
candidates for the Board of Directors at the company's annual general meeting on 10 April 2014.
Diversity at management level
H+H International A/S's organisation represents different skills, nationalities, ages and genders, and international!
experience. Recruitment for management positions takes place with an emphasis on skills and experience, and without
discrimination on the grounds of age, gender, nationality etc.
H+H International A/S's organisation is very small with only 13 employees (including the two members of the Executive
Board) of different nationalities and ranging in age from 30 to 60+, five of whom are women and elght men. There are
eight management positions at various levels of the company, one of which is held by a woman.
Pursuant to section 139a of the Danish Companies Act, H+H International A/S has set an objective for the gender
distribution of the Board of Directors, whereby the Board shall seek to ensure that each gender is represented by at least
one shareholder-elected board member when the Board of Directors consists of four or five shareholder-elected board
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 24
members, and that each gender is represented by at least two shareholder-elected board members when the Board of
Directors consists of six, seven or eight shareholder-elected board members. This objective is to be reached no later than
by the annual general meeting in 2016; however, it has already been met, since the present five shareholder-elected board
members consist of one woman and four men.
In accordance with the exemption granted to small organisations with fewer than 50 employees in respect of the
obligation to set objectives and produce a policy to ensure diversity, including a higher proportion of the under-
represented gender, cf. section 139a(6) of the Companies Act, H+H International A/S has not set any objectives or
produced any policies to ensure diversity in the company's management. Even though this is in accordance with the
Companies Act, the lack of diversity-related objectives and policies for management positions is a departure from
recommendation 2.1.6 of the Æecommendations on Corporate Governance, since the recommendations are stricter in this
respect than the obligations under the Companies Act.
The decision not to establish any objectives or policy with regard to diversity is due to the very small size of H+H
International's organisation, with fewer than 15 persons in total. The limited number of employees means there are only
limited or no changes in the organisation in any given year, which again makes it very difficult to effectively pursue any
diversity objectives or policy within a meaningful time frame.
It should be noted that management of subsidiaries is generally diverse with people of different nationalities, ages and
genders working as managers within production, sales, marketing, HR and finance.
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 25
Shareholder information
SHARE CAPITAL AND SHAREHOLDERS
H+H International A/S has share capital with a nominal value of DKK 490,500,000 Ccarrying a total of 98,100,000 votes
and divided into 9,810,000 shares, each with a nominal value of DKK 50 and carrying 10 votes.
As at 1 January 2014, H+H International A/S had 3,229 registered shareholders (corresponding to 74.82% of the share
capital), including 160 foreign shareholders, and the company held 20,489 treasury shares. On the same date, H+H
International A/S had three major shareholders, each holding more than 5% of its shares: ATP (11.52%), Laurids Jessen
and his company Danebroge ApS (6.76%) and LD Equity 1 K/S (5.84%).
Members of H+H International A/S's Board of Directors and Executive Board are included in the company's insider
register. These persons and persons connected to them are only allowed to buy and sell shares in the company during the
four weeks immediately after the publication of each interim financial report or annual report, If in possession of inside
information, such persons are prohibited from trading even during the said four-week period for as long as this information
remains inside information. The company may not buy or sell its own shares during a three-week period immediately
preceding each interim financial report or annual report, and the company may not trade whilst in possession of inside
information.
CAPITAL STRUCTURE
The Board of Directors and Executive Board regularly evaluate the company's capital structure on the basis of expected
cash flow and in the light of the company's earnings, debt, loan covenants etc. with a view io ensuring an appropriate
balance between adequate future financial flexibility and a reasonable return to shareholders.
H+H International A/S had a solvency ratio of 22.7% at the end of 2013, compared with 30.0% at the end of 2012. The
company's net interest-bearing debt totalled DKK 532 million at the end of 2013, compared with DKK 539 million at the
end of 2012. |
SHARES
H+H International A/S's shares are listed on NASDAQ OMX Copenhagen in the Small Cap segment (ticker code HH, ISIN
DK0015202451). The company has a single share class, and the Board of Directors is of the opinion that the shares' listing
increases the company's options when it comes to raising new capital.
The company's share price rose by around 83% to DKK 47.7 per share in 2013. By way of comparison, the OMXC20 index
gained around 32% and the OMXCXC20 Index gained 45.5%. Turnover in 2013 was 5,903,077 shares at a total price of
DKK 211 million.
DIVIDENDS
All major investment projects were completed in 2009, and investments have been kept at low levels since 2010. In the
current trading environment, H+H expects investments in the region of DKK 60 million in 2014, However, H+H
International A/S's net interest-bearing debt is still relatively high compared with current revenue and earnings levels, and
itis still uncertain when and how quickly revenue and earnings will return to stable growth.
Given the loss after tax for 2013 of DKK 93 million, and given the above uncertainty with respect to H+H's future earnings,
the Board of Directors will recommend to the annual general meeting on 10 April 2014 that no dividend be paid for the
2013 financial year. lt should also be noted that under the terms of H+H International A/S's loan agreement with Danske
Bank A/S, the Board of Directors is subject to an obligation to the effect that any proposed resolution concerning the
distribution of dividends for a given financial year must not exceed 50% of the company's profit after tax in the financial
year in question.
1410410E0GSN08286 .
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 26
Despite recent years' negative results as a consequence of the economic crisis, it is stilla natural overall objective for H+H
International A/S to generate a reasonable return for its shareholders in the form of share price appreciation and the
distribution of dividends and/or reduction of share capital through the buyback and cancellation of shares in the company.
INVESTOR RELATIONS POLICY
The purpose of H+H International A/S's financial communications and other IR activities is to seek a valuation of the
company's shares that constantly reflects H+H's current situation and expectations and to achieve adequate liquidity in
trading in the shares.
All communications reflect the requiremenis that the information must be open, honest and timely. The main financial
" communications are via the annual report, interim financial reports and other company announcements. H+H
International A/S is also in regular dialogue with professional and private investors, analysts and the business press. This
dialogue takes the form of individual presentations to major investors or presentations to groups of investors. The
company is not normally available for dialogue about financial matters in the three-week period leading up to the
publication of an interim financial report or ofthe annual report.
Relevant investor information is available on the company's website www.HplusH.com. In 2013 the company held more
than 50 investor meetings and published 15 company announcemenis. The company is covered by an analyst from
Danske Bank Markets.
Enquiries concerning IR issues should be addressed to CFO Niels Eldrup Meidahl at shareholder&HplusH.com or by
telephone on +45 35 27 02 00.
ANNUAL GENERAL MEETING
The next annual general meeting will be held on 10 April 2014. The time and place will be announced in the notice of the
annual general meeting published via the Danish Business Authority's IT system as well as in a company announcement
and on the company's website. The notice will be published no earlier than five weeks and no later than three weeks prior
to the annual general meeting.
Documents for use at the annual general meeting wili be made available on the company's website www.HplusH.com no
later than three weeks before the meeting. Shareholder proposals for the agenda of the annual general meeting must be
submitted no later than six weeks before the meeting (i.e. before 27 February 2014).
Unless otherwise stated in the Danish Companies Act or the company's Articles of Association, resolutions on the
amendment of the Articles of Association will be valid only if carried by at least two-thirds of the votes cast and ofthe
voting share capital represented at the general meeting.
FINANCIAL CALENDAR 2014
DES
MENENNEE HL GCLSNEN
14 March 2014
Annual Report 2013
10 April 2014 Annual General Meeting
22 May 2014 Interim financial report Q1 2014
21 August 2014 Interim financial report H1 2014
20 November 2014 Interim financial report Q1-Q93 2014
141041QE0GSN06287
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 27
Board of Directors
MØN AJ | i
From left: Pierre-Yves Jullien, Henriette Schtitze, Kent Arentoft, Stewart A Basele >y and Asbjørn Berge.
According to the company's Articles of Association, all shareholder-elected board members are elected by simple majority
for a term of office lasting until the next annual general meeting. The current term of office expires at the annual general
meeting on 10 April 2014. At the coming annual general meeting, the Board of Directors will propose the re-election of all
members. If the annual general meeting follows the Boards proposal for board members, these board members will re-
elect Kent Arentoft as Chairman of the Board of Directors. The remuneration of the individual members of the Board of
Directors and the Executive Board in 2013 is presented in note 3 to the financial statements.
KENT ARENTOFT
Male. Born 1962. President and CEO, Dalhoff Larsen & Horneman A/S.
<=... Chairman. Joined the Board of Directors in 2013. Member of the Nomination Committee (chairman) and
Remuneration Committee (chairman).
= Holds 10,000 H+H shares, all acquired in 2013.
=…… Broad organisation and management experience in international companies in the building materials and contracting
sector, in particular within strategy development and M&A transactions.
=…… Independent board member as defined in the Æecommendations on Corporate Governance.
Other management positions and directorships
=…… Member of the board of directors of Xilco Holding (CH) AG (Switzerland) and one subsidiary.
STEWART A BASELEY :
Male. Born 1958. Executive Chairman, Home Builders Federation (UK).
==. Joined the Board of Directors in 2010. Member of the Remuneration Committee.
==. Holds 10,000 H+H shares, with no changes in his holding in 2013.
=…… Experience in the international house-building industry and the developer industry, particularly in the UK, as well as
international management experience.
=… Independent as defined in ihe Æecommendations on Corporate Governance.
1410410EQGSN06288
ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 28
Other management positions and directorships
=…… Member of the board of directors of Banner Homes Group PLC (UK), four subsidiaries of Home Builders Federation
(UK), HBF Insurance PCC Limited (Guernsey), the National House-Building Council (UK), Akomex Sp. z 0.0. (Poland),
MEDl-system Sp. z 0.0. (Poland) and ProService Agent Transferowy Sp. z 0.0. (Poland).
<= Senior Advisor on Central and Eastern Europe for Highlander Partners L.P. (USA).
<…… Chairman of Habitat for Humanity Great Britain (UK).
=… Patron of Children with Special Needs Foundation (UK).
ASBJØRN BERGE
Male. Born 1955. Professional board member.
=… Joined the Board of Directors in 2010. Member of the Audit Committee, Nomination Committee and Remuneration
Committee.
=…… Holds 6,000 H+H shares, with no changes in his holding in 2013.
=…… Experience in the management of production companies within the building materials sector and the building
industry, and long-standing experience of board work.
=… Independent as defined in the Æecommendations on Corporate Governance.
Other management positions and directorships
…… Chairman of the board of directors of Board Governance A/S, Carnad A/S, Freja Transport & Logistics A/S, KA.
Interiør Holding A/S and one subsidiary, and Trend Lines A/S.
=…… Deputy chairman of Palsgaard Træ A/S and member of the boards of five subsidiaries.
=…… Member of the board of directors and managing director of Berge Invest ApS and Industri Invest Herning A/S.
=…… Member of the board of directors of Bizzorp Holding ApS and two subsidiaries, C.C. Contractor A/S, Da'core A/S,
Dansk Vækstkapital, Ejendomsselskabet Berlin og Hamborg A/S, Godt Smil Holding ApS, Junckers Industrier A/S,
Lilleheden A/S and two subsidiaries, Pipers Teglværker A/S and one subsidiary, Plus A/S and Træfonden.
PIERRE-YVES JULLIEN
Male. Born 1950. President and CEO, Hempel A/S.
=…… Joined the Board of Directors in 2010. Member of the Audit Committee.
=… Experience in the management of a major global manufacturer, including turnarounds and efficiency Improvement as
well as B2B sales.
=…… Independent as defined by the Recommendations on Corporate Governance.
Other management positions and directorships
=…… Managing director, chairman or member of the board of directors of 12 companies in the Hempel Group.
=…… Member of the board of Saudi Arabian Packaging Industry W.L.L. (Saudi Arabia).
HENRIETTE SCHUTZE
Female. Born 1968. Executive director and CFO, Georg Jensen A/S, until mid 2013.
=…… Joined the Board of Directors in 2013. Member of the Audit Committee (chairman).
=… Extensive financial management experience from international listed and unlisted companies as well as broad
management experience including turnarounds, change management and productivity/efficiency improvements.
=…… Independent as defined by Æecommendations on Corporate Governance.
Other management positions and directorships
== Member of the board of directors of IMD Alumni Club Denmark.
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ANNUAL REPORT 2013 | MANAGEMENT'S REVIEW 29
Executive Board and organisation
MICHAEL TROENSEGAARD ANDERSEN
Male. Born 1961. CEO of H+H International A/S since 2011.
<… Holds 19,465 H+H shares, of which 4,400 net were acquired in 2013. All shares are invested in a matching share
incentive programme.
Background
==. 2004-2011: Emptloyed at Trelleborg AB, from 2008 to 2011 as president of a global business unit consisting of 10
subsidiaries in Europe, the USA and Asia, and from 2004 to 2008 as managing director of Trelleborg Sealing
Solutions Helsingør A/S.
<… 1997-2004: Employed in executive positions within sales, marketing and general managernent at Alto International
A/S (now part of the Nilfisk Group).
==. Holds an M.Sc. (Engineering) and a B.Comm. (Accounting).
NIELS ELDRUP MEIDAHL
Male. Born 1973. CFO of H+H International A/S and member of the management team since 2009. Member of the
Executive Board since 2010.
=……. Holds 10,802 H+H shares, of which 1,435 net were acquired in 2013. All shares are invested in a matching share
incentive programme.
Background
"… 2006-2009: CFO of DSV Miljø A/S.
=… 2002-2006: Manager, investor relations and tax, at Novozymes A/S.
= 2001-2002: CFO of Learning Lab Denmark.
=… 1997-2001: Accountant and tax advisor at Arthur Andersen.
==... Holds an LL.M. and an M.Sc. (Business Administration and Auditing).
Other management positions and directorships
==. Chairman of the board of directors of SoundEar A/S.
=…… Member ofthe board of directors of DanWEEE Recycling A/S.
ORGANISATION
Group level
projects
HEKSE BEEN
Local level
Region X
el Management nm
” and support DA
1410410E0GSN06290
Income statement
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 30
Group Parent company
Note (DKK'000) 2013 2012 2013 2012
2 Revenue 1,260,070 1,223,627 0
3,16 Production costs (998,583) (951,366) 0 0
Gross profit 261,487 272,261 o
3 Sales and distribution costs (88,282) (90,272) ' 0 0
3 Administrative costs (87,224) (91,901) (24,886) (27,707)
4 Other operating costs (7,604) (6,252) (3,610) (20,444)
5 Other operating income 15,189 19,575 19,323 22,921
Profit/loss before depreciation, amortisation .
and financial items (EBITDA) 93,566 103,411 - (9,173) (25,230)
Depreciation and amortisation (86,742) (100,130) (1,395) (1,421)
7 Impairment losses (940) 32,327 " (144,965) (111,435)
Operating profit/loss (EBIT) 5,884 35,608 (155,533) (138,086)
8 Financial income 281 1,571 24,264 34,349
Financial expenses (42,754) (44,476) (23,684) (32,711)
Loss from continuing operations before tax (36,589) (7,297) (154,953) (136,448)
10 Tax on profit from continuing operations (3,520) (29,550) ' 0 0
Loss for the year from continuing operations (40,109) (36,847) (154,953) (136,448)
24 Loss for the year from discontinued operations (52,364) (45,511) ' 0 0
Loss for the year (92,473) (82,358) ' (154,953) (1365,448)
12 Earnings per share (EPS-Basic) (DKK) (9.45) . (8.41)
12 Diluted earnings per share (EPS-D) (DKK) (9.45) (8.41)
12 Earnings per share from continuing operations (EPS-Basic) (DKK) (4.10) (3.76) "
12 Diluted earnings per share from continuing operations (EPS-D) (DKK) (4.10) (3.76)
1410410EQ0GSN06291
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 31
Statement of comprehensive income
- Group Parent company
Note (DKK"000) 2013 2012 2013 2012
Profit for the year (92,473) (82,358) — (154,953) (136,448)
Other comprehensive income:
ltems that will not be reclassified subsequently to profit or loss:
Actuarial losses and gains (6,263) (14,249) 0
Tax on actuarial losses and gains 1,285 4,039 0 0
(4,978) (10,210) 0
items that may be reclassified subsequently to profit or loss:
Foreign exchange adjustments, foreign companies ' (31,270) 39,178 " o 0
Tax on foreign exchange adjustments, foreign companies . 4,220 (1,616) 0 0
(27,050) 37,562 0 0
Other comprehensive income after tax (32,028) 27,352 0 0
Total comprehensive income for the year ' (124,501) (55,006) —… (154,953) (136,448)
1410410E0GSN06292
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 32
Balance sheet at 31 December
ASSETS
Group Parent company
Note (DKK"000) 2013 2012 2013 2012
Goodwill 58,559 59,062 a 0
Other intangible assets 4,669 11,835 3,758 5,010
13 Intangible assets 63,228 70,897 . 3,758 5,010
Land and buildings 341,415 345,557 0 O
Plant and machinery 388,180 445,099 0 o
Fixtures and fittings, tools and equipment 134,540 154,690 | 612 457
Property, plant and equipment under construction 18,740 15,608 0 0
13 Property, plant and equipment 882,875 960,954 6i2 457
14 Deferred tax assets 16,338 13,728 0 0
15 Equity investments in subsidiaries 0 0 800,605 891,550
Receivables from subsidiaries o 0 350,888 380,852
Other non-current assets 16,338 13,728 1,151,493 1,272,402
Total non-current assets 962,441 1,045,579 1,155,863 1,277,869
16 Inventories 166,202 194,213 0
17 Trade receivables 39,393 22,695 "0 0
Tax receivable 493 495 G
17 Other receivables 13,977 16,024 " 418 540
Prepayments 5,882 7,279 0 0
Cash 40,084 15,475 15. 15
Current assets 266,031 256181 433 555
24 Assets held for sale 64,476 87,667 . 0 0
Total current assets 330,507 343,848 . 433 ' 555
Total assets 1,292,948 1,389,427 1,156,296 1,278,424
1410410E0GSN06293
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 33
Balance sheet at 31 December
EQUITY AND LIABILITIES
' Group Parent company
Note (DKK '000) 2013 2012 2013 2012
Share capital 490,500 490,500 490,500 . 490,500
Translation reserve (114,765) (87,715) . 0 0
Retained earnings/losses (81,848) 15,097 289,810 444,257
Equity 293,887 417,882 780,310 934,757
19 Pension obligations 156,912 167,401 0 0
20 Provisions 4,000 6,940 0 0
14 Deferred tax liabilities 17,493 18,033 7,264 7,264
21 Credit institutions 571,678 554.112 294,403 253,967
Non-current liabilities 750,083 746,486 301,667 261,231
Trade payables 119,507 107,097 2,784 1,708
Income tax 666 750 0 0
Payables to subsidiaries 0 0 60,616 66,880
Other payables 79,106 65,000 | 10,919 13,848
Current liabilities 199,279 172,847 74,319 82,436
24 Liabilities relating to assets held for sale 49,699 52,212 0 0
Total current liabilities 248,978 225,059 74,319 ' 82,436
Total liabilities 999,061 971,545 | 375,986 343,667
Total equity and liabilities 1,292,948 1,389,427 1,156,296 1,278,424
1410410E0GSN06294
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 34
Cash flow statement
Group Parent company
Note (DKK'000) 2013 2012 2013 2012
Operating profit/loss 5,884 35,608 . (155,534) (138,086)
Financial items, paid (29,550) (42,904) . 3,257 1,638
Depreciation, amortisation and impairment losses 87,682 67,803 146,360 112,856
Other adjustments (3,200) (16,737) (2,171) 205
Change in inventories (3,287) 3,885 ” 0 0
Change in receivables (18,335) 61,528 123 137
Change in trade payables and other payables 39,623 (32,021) (1,853) 3,795
Change in provisions ” (20,759) (33,321) 0 0
Income tax paid 175 610 0 0
Operating activities 58,233 44,451 (9,818) (19,455)
Sale of property, plant and equipment ' 5,785 7,628 222 216
Capital contributions to subsidiaries 0 O0 (54,020) (25,261)
25 Sale of subsidiaries oa 121,144 0 56,684
Acquisition of property, plant and equipment and intangible assets (35,907) (24,704) | (520) (254)
Investing activities (30,122) 104,068 (54,318) 31,385
Free cash flow 28,111 148,519 " (64,136) 11,930
Change in intragroup balances o o| 23,700 9,631
Raising of long-term debt 25,413 0. 40,436 0
Reduction of long-term debt 0 (101,089) : 0. (21,564)
Financing activities 25,413 (101,089) . 64,136 (11,933)
24 Cash flow from discontinued operations . (28,777) (55,580) ' 0 o
Cash flow for the year 24,747 (8,150) O (3)
Cash and cash equivalents at 1 January 15,475 22,454 15 18
Foreign exchange adjustments of cash and cash equivalents (138) 1,171 0 0
Cash and cash equivalents at 31 December ' 40,084 15,475 15 15
Cash and cash equivalents at 31 December, continuing operations 40,006 | 15,474 ;
Cash and cash equivalents at 31 December, discontinued operations 78 1
40,084 15,475
1410410E0GSN06295
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 35
Statement of changes in equity
(DKK 000) ' Group
Share Translation Retained
capital reserve earnings Total
Equity at1 January 2012 490,500 (125,277) 107,449 472,672
Loss for the year 0 0 (82,356) (82,356)
Other comprehensive income:
Foreign exchange adjustments, subsidiaries o 39,178 o 39,178
Actuarial gains/losses on pension plans 0 0 (14,249) (14,249)
Tax on other comprehensive income 0 (1,616) 4,039 2,423
Net gains recognised directly in equity 0 37,562 (10,210) 27,352
Total comprehensive income 0 37,562 (92,566) (55,004)
Share-based payment 0 0 214 214
Total changes in equity 0 37,562 (92,352) (54,790)
Equity at 31 December 2012 490,500 (87,715) 15,097 417,882
Loss for the year 0 0 (92,473) (92,473)
Other comprehensive income:
Foreign exchange adjustments, subsidiaries 0 (31,270) 0 (31,270)
Actuarial galns/losses on pension plans 0 0 (6,263) (6,263)
Tax on other comprehensive income 0 4,220 1,285 5,505
Net gains recognised directly in equity 0 (27,050) (4,978) (32,028)
Total comprehensive income 0 (27,050) (97,451) (124,501)
Share-based payment 0 0 506 506
Total changes in equity 0 (27,050) (96,945) (123,995)
Equity at 31 December 2013 490,500 (114,765) (81,848) 293,887
1410410E0GSN06296
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 36
Statement of changes in equity
(DKK "000) Parent company
Share Retained Proposed
capital earnings dividend Total
Equity at 1 January 2012 430,500 580,491 (SN 1,070,991
Loss for the year o (136,448) 0 (136,448)
Other comprehensive income 0 0 0 0
Total comprehensive income o (136,448) 0 (136,448)
Share-based payment 0 214 0 214
Total changes in equity 0 (136,234) 0 (136,234)
Equity at 31 December 2012 4390,500 444,257 0 934,757
Loss for the year 0 (154,953) 0 (154,953)
Other comprehensive income 0 0 0 o
Total comprehensive income 0 0 0 0
Share-based payment 0 506 0 506
Total changes in equity 0 (154,447) 0 (154,447)
Equity at 31 December 2013 490,500 289,810 0 780,310
1410410QE0GSWN06297
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 37
Notes to the consolidated
financial statements
Notes - Financial statements
1 General accounting policies 38
Notes - Income statement
2 Segment information 41
3 Staff costs 43
4 Other operating expense! 46
5 Other operating income ; 47
6 Depreciation and amortisation 47
7 Impairment losses 47
8 Financialincome 48
9 Financial expense 48
10 Tax 49
11 Income statement classified by function 50
12 Earnings per share (EPS) 51
Notes - Balance sheet
13 Intangible assets and property, plant and equipment 52
14 Deferred tax 56
15 Investments in subsidiaries. 58
16 Inventories/production costs 59 . |
17 Trade and other receivables 60
18 Share capital and treasury shares 61
19 Pension obligations 62
20 Provisions 67
21 Credit institutions 68
Notes - Supplementary information
22 Contingent liabilities . 68
23 Auditors' remuneration 69
24 Discontinued operations and assets held for sale 69
25 Acquisition and divestment of subsidiaries and activities 7i
26 Financial instruments and financial risks 71
27 Related parties 76
28 Events after the balance sheet date 76
141041QEQGSN06298
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 38
Notes — Financial statements
1 GENERAL ACCOUNTING POLICIES
The annual report for the period 1 January — 31 December 2013 comprises both the consolidated financial statements of H+H Interna-
tional A/S and its subsidiaries (the H+H Group) and separate financial statements for the parent company.
H+H International A/S is a public limited company registered in Denmark. The annual report of H+H International A/S for 2013 has been
prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure
requirements for annual reports of listed companies.
The Board of Directors and Executive Board discussed and approved the annual report of H+H International A/S for 2013 on 14 March
2014. The annual report will be submitted to the shareholders of H+H International A/S for adoption at the annual general meeting on 10
April 2014.
Basis of preparation
The annual report is presented in DKK rounded to the nearest DKK 1,000. The annual report has been prepared using the historical cost
principle, However, recognised derivatives are measured at fair value, and non-current assets and disposal groups classified as held for
sale are measured at the lower of their carrying amount before the reclassification and fair value less selling costs.
There have been no changes to the accounting policies compared with last year, except for implementation of new accounting stan-
dards. The accounting policies have been applied consistently to the financial year and the comparative figures.
The accounting policies applied to the consolidated financial statements as a whole are described below, while the remaining ac-
counting policies are described in connection with the notes to which they relate. The aim is to aid a better understanding of the indivi-
dual items. The descriptions of accounting policies in the notes form part of the overall description of accounting policies:
Adoption of new and revised IFRSs
H+H International A/S has adopted the new or revised and amended International Financial Reporting Standards (IFRSs) issued by IASB
and endorsed by the European Union effective for the financial year 2013. Based on an analysis carried out by H+H International A/S,
the application of the new IFRSs has not had a material impact on the consolidated financial statements in 2013 and we do not antici-
pate any significant impact on future periods from the adoption of these new IFRSSs.
New IFRSs which have been issued but not yet become effective
In addition to the above, IASB has issued a number of new or amended standards and interpretations (IFRSs), some of which have been
endorsed by the European Union but not yet come into effect. H+H International A/S has assessed the impact of these IFRSs that are
not yet effective, None of the new standards or interpretations are expected to have a material impact on H+H International A/S.
DESCRIPTION OF ACCOUNTING POLICIES
Consolidated financial statements
The consolidated financial statements include the parent company H+H International A/S and subsidiaries in which H+H International
A/S has control of the subsidiary's financial and operating policies so as to obtain returns or other benefits from the subsidiary's
activities. Control exists when H+H International A/S holds or has the ability to exercise, directly or indirectly, more than 50% ofthe
voting rights or otherwise has control of the subsidiary in question.
The consolidated financial statements have been prepared by aggregation of the parent company's and the individual subsidiaries'
financial statements, applying the H+H Group's accounting policies. Intragroup income and expenses, shareholdings, balances and
dividends as well as realised and unrealised gains arising from intragroup transactions are eliminated on consolidation.
"Equity investments in subsidiaries are offset against the proportionate share of the fair value of the subsidiaries' identifiable net assets
and recognised contingent liabilities at the date of acquisition. Accounting items of subsidiaries are fully recognised in the consolidated
financial statements.
Foreign currency translation
For each entity included in the consolidated financial statements, a functional currency has been determined. The functional currency
of an entity is the currency of the primary economic environment in which the entity operates. Transactions in currencies other than the
functional currency are accounted for as transactions in foreign currencies.
On initial recognition, transactions denominated in foreign currencies are translated into the functional currency at the exchange rates
at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and at the date of
payment are recognised in the income statement as financial income or financial expenses.
1410410QEQGSR06299
ANNUAL REPORT 2013] FINANCIAL STATEMENTS 39
Notes — Financial statements
1 GENERAL ACCOUNTING POLICIES — CONTINUED
Receivables, payables and other monetary items denominated in foreign currencies are translated into the functional currency atthe
exchange rates at the balance sheet date. The difference between the exchange rate at the balance sheet date and the exchange rate at
the date on which the receivable or payable arose or the exchange rate used in the last annual report is recognised in the income state-
ment as financial income or financial expenses.
On recognition in the consolidated financial statements of foreign entities with a functional currency other than DKK, income state-
ments are translated at the exchange rates at the transaction date and balance sheet items are translated at the exchange rates at the
balance sheet date. An average exchange rate for each month is used as the exchange rate at the transaction date to the extent that this
does not give a significantly different view. Foreign exchange differences arising on translation of the opening equity of foreign entities at
the exchange rates at the balance sheet date, and on translation of income statements from the exchange rates at the transaction date
to the exchange rates at the balance sheet date, are recognised as other comprehensive income.
Foreign exchange adjustments of balances considered part of the overall net investment in entities with a functional currency other than
DKK are recognised in the consolidated financial statements as other comprehensive income. Correspondingly, foreign exchange gains
and losses on that part of loans and derivative financial instruments entered into to hedge the net investment in such entities which
effectively hedges against corresponding exchange gains/losses on the net investment in the entity are recognised as other compre-
hensive income.
Onthe complete or partial disposal of a foreign operation, or on the repayment of balances that are considered part of the net invest-
ment, the share of the cumulative exchange adjustments that is recognised in equity and attributable to this is recognised in the income
statement when the gain or loss on disposal is recognised. On the disposal of partially owned foreign subsidiaries, the part of the trans-
lation reserve attributable to non-controlling interests is not transferred to the income statement.
On the partial disposal of foreign subsidiaries without loss of control, a proportionate share of the translation reserve is transferred
from the parent company shareholders' share of equity to non-controlling interests' share of equity.
The repayment of balances that are considered part of the net investment is not itself considered to constitute partial disposal of the
subsidiary.
Cash flow statement
The cash flow statement shows the cash flows for the year, broken down by operating, investing and financing activities, and the year's
change in cash and cash equivalenis as well as the cash and cash equivalents at the beginning and end of the year.
The cash flow effect of acquisitions and disposals of entities is shown separately under cash flows from investing activities. Cash flows
from acquisitions of entities are recognised in the cash flow statement from the date of acquisition, and cash flows from disposals of
entities are recognised up to the date of disposal.
Cash flows in currencies other than the functional currency are translated at average exchange rates, unless these deviate significantly
from the rates at the transaction date.
Cash flows from operating activities are determined as pre-tax profit adjusted for non-cash operating items, change in working capital,
interest received and paid, and income tax paid.
Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities; acquisi-
tions and disposals of intangible assets, property, plant and equipment, and other non-current assets; and acquisitions and disposals of
securities that are not recognised as cash and cash equivalents. Finance leases are accounted for as non-cash transactions.
Cash fiows from financing activities comprise changes in the size or composition of the share capital and associated expenses as well as
the raising of loans, repayment of interest-bearing debt, purchase and sale of treasury shares, and payment of dividends.
Cash flows relating to assets held under finance leases are recognised as payment of interest and repayment of debt. Cashand cash
equivalents comprise cash and securities with a maturity of less than three months at the time of acquisition that are readily convertible
to cash and are subject to an insignificant risk of changes in value.
1410410E0GSN06300
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 40
Notes — Financial statements
1 GENERAL ACCOUNTING POLICIES — CONTINUED
LN Critical accounting estimates and judgemenis
Determining the carrying amounts of some assets and liabilities requires management to make judgements, estimates and assump-
tions concerning future events. The estimates and assumptions made are based on historical experience and other factors that are
believed by management to be sound under the circumstances but that, by their nature, are uncertain and unpredictable. The assump-
tions may be incomplete or inaccurate, and unforeseen evenis or circumstances may occur. Moreover, the H+H Group is subject to risks
and uncertainties that may lead to the actual outcomes differing from these estimates. It may be necessary to change estimates made
previously as a result of changes in the factors on which these were based or as aresult of new knowledge or subsequent events.
Critical accounting estimates made in connection with the financial reporting are set out in the following notes:
Impairment testing of intangible assets, note 13
Impairment testing of property, plant and equipment, note 13
Useful lives of production assets, note 13
Recovery of deferred tax assets, note 14
Valuation of inventories, note 16
Valuation of receivables, note 17
Defined benefit pension plans, note 19
Assets held for sale and discontinued operations, note 24
1410410EQ0GS806301
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 41
Notes — Income statement
2 SEGMENT INFORMATION
Group
(DKK million) 2013
Western Europe Eastern Europe Total
Western Eastern
Production Sales Europe, Production Sales Europe, Discontinued Reporting
companies companies total companies companies total operations” segments
Revenue, external 7758 1604 936.2 323.9 0 323.9 43.7 1,303.8
Revenue, internal 71.7 (sl 71.7 0.8 0 0.8 0. 72.5
EBITDA 68,0 (0.6) ” 67.4 36.8 (1,1) 35.7 (45.8) 57.3
Depreciation (53.4) (0.9) (54.3) (32.4) 0 (32.4) 0 (86,7)
EBITA 14.6 (1.5) . 13.1 4.3 (11) 3.2 (45.8) (29.5)
Impairment losses (0.9) o (0.9) 0 0 0 (3.3) ' (4.2)
Operating profit (EBIT) 13.7 (1.5) 12.2 4.3 (1.1) 3.2 (49.1) ' (33.7)
Financial income 3.2 0.2. 3.4 0.1 0 01 0 3.5
Financial expenses (25.0) (16) (26.6) (16.4) (2.3) (18.7) (3.3) (48.6)
Loss before tax” (8.2) (2.8) . (11.0) (12.1) (3.3) (15.4) (52,4) . (78.8)
Non-current assets 721.6 16.9 . 738,5 486.1 1.3 487,4 18.6 1,244,5
Investments in intangible assets | ' ' .
and property, plant and equipment 25,4 0.1 : 25.5 9.6 0 9,6 0,6 35.7
Assets 954,3 53.8 1,008.1 567.9 14 569.3 18.6 1,596.0
Equity 371.5 24 3739 199,9 (39.1) 160.8 (15.3) 519,4
Liabilities 582,8 514 634.2 368.0 40.6 408.6 33.9 1,076.7
Average full-time equivalent staff 390 41 431 413 0 413 28 872
Group
(DKK million) 2012
Western Europe Eastern Europe Total
— Western Eastern | i
Production Sales — Europe, Production Sales Europe, Discontinued Reporting
companies companies total companies companies . total operations” segments
Revenue, external 668.0 192.1 860,1 358.4 51 363.5 2022 1,425,8
Revenue, internal 108.1 0 : 108.1 10.1 0.1 10.2 0 118,3
EBITDA 85,8 67" 925 37.8 (1.0) 36.8 (38.1) 91.2
Depreciation (54.4) (0.9) (55.3) (43.5) o (43.5) (3.2) (102.0)
EBITA 31.4 5,8 37.2 (5.7) (1.0) (6.7) (41.3) . (10.8)
Impairment losses 0 O o 32.3 o 32.3 o 32,3
Operating profit (EBIT) 31,4 5.8 . 37.2 26.6 (1.0) 25.6 (41.3) 21.5
Financial income 3.3 0.6 3.9 0.3 0.2 0.5 0.1 4.5
Financial expenses (25.4) (2.1) (27.5) (20.1) (13) .. (21.4) (3.3) (52.2)
Profit/loss before tax== 9.3 4.3 13.6 6.8 (2.1) 4.7 (44.5) (26.2)
Non-current assets 751.7 21.2 772.39 533.4 1.4 534,8 0 " 1,307.7
Investmenits in intangible assets ' |
and property, plant and equipment 19.1 0.3 19,4 72 0 7.2 0 26.6
Assets 1,012.7 62.9 : 1,075,6 620.2 17 621,9 26.7 ' 1,724.2
Equity 382.4 117 394,1 244,5 (36,6) .. 207,9 (28.4) : 573,6
Liabilities 627,6 511 . 678.7 3756 38.4 4140 55.3 " 1,148.0
Average full-time equivalent staff 459 44 ' 503 482 3 485 I 989
= See note 24.
=x H+H's consolidated profit before tax and management fee etc.
Transactions between segment are carried out at arm's length.
141041QE0GSN06302
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 42
Notes — Income statement
2 SEGMENT INFORMATION — CONTINUED
Reconciliation of revenue, loss before tax, assets and liabilities of reporting segments Group
(DKK million) ” 2013 2012
Segment revenue for the reporting segments ” 1,376.3 1,544.1
Elimination of inter-segment sales (72.5) (118.3)
Revenue for discontinued operations (43,7) (202.2)
Revenue 1,260.1 1,223.6
Segment loss before tax for reporting segments (78.8) (26.2)
Loss from discontinued operations 52.4 445
Non-allocated Group expenses, central functions (10,2) (25.6)
Loss before tax (36.6) (7.3)
Total assets for reporting segmentis 1,596.0 ” 1,724.2
Other non-allocated assets, eliminations and similar (284,5) (308,1)
Assets relating to discontinued operations (18.6) (26.7)
Assets ' 1,292.9 1,389.4
'
Total labilities for reporting segments 1,076.7 1,148.0
Other non-allocated obligations, eliminations and similar (43.7) (124,3)
Liabilities relating to discontinued operations (33.9) (52.2)
Liabilitles 999,1 971.5
Revenue in Denmark was DKK 77,906 thousand in 2013 (2012: DKK 94,848 thousand). Non-current assets in Denmark at year-end 2013
amounted to DKK 7,283 thousand (2012: DKK 10,289 thousand). 2
Key customers
Travis Perkins in the United Kingdom represented approx. 28% of the H+H Group's total revenue in 2013 (2012: approx. 24%). The follow-
ing countries represent more than 10% of revenue or non-current assets.
Group
(DKK million) 2013 2012
” Non-current Non-current
Revenue assets Revenue assets
UK |. 508.0 188,1 411.2 209.2
Germany 2734 280.3 354,1 290.6
Poland 169.0 254,3 176.8 275.4
Russia -— 154,7 227.4 143.2 265.3
Other countries and eliminations 155.0 12,3 138,3 5,1
1,260,1 962,4 1,223.6 1,045.6
When presenting information on geographical areas, information on revenue is based on the legal entity. Allrevenue relates to sales of
goods.
141041QEOGSN06303
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 43
Notes — Income statement
2 SEGMENT INFORMATION — CONTINUED
Accounting policies
Segment information is prepared in accordance with H+H's accounting policies and internal financial reporting.
Segment revenue, segment expenses, segment assets and segment liabilities are those iterns that are directly attributabletothe
individual segment or can be allocated to the segment on a reliable basis. Unallocated items comprise primarily assets, liabilities
income and expenses relating to H+H's administrative functions, investing activities etc.
Non-current segment assets are those non-current assets that are employed directly by the segment in its operating activities,
including intangible assets and property, plant and equipment.
Current segment assets are those current assets that are employed directly by the segment in its operating activities, including
inventories, trade receivables, other receivables, prepayments, and cash and cash equivalents.
Segment liabilities are those liabilities that result from the segment's operating activities, including trade payables and other payables.
3 STAFF COSTS
Group Parent company
(DKK '000) 2013 2012 2013 2012
Wages and salaries 222,180 215,165 14,785 13,310
Defined contribution plans, see note 19 9,640 9,543 a 0
Share-based payment 506 214 401 146
Remuneration to the Board of Directors 1,838 1,950 1,838 1,950
Other staff costs . 34,258 34,340 469 481
268,422 261,212 i 17,493 15,887
Staff costs are recognised as follows:
Production costs ” 157,643 151,911 O 0
Sales and distribution costs 60,068 57,310 0o 0
Administrative costs ” 50,711 51,991 17,493 15,887
268,422 261,212 17,493 15,887
Average full-time equivalent staff ' 885 1,001 13 12
Remuneration to the Executive Board:
Michael Troensegaard Andersen (CEO):
Salary and fees 2,700 2,700 2,700 2,700
Bonus plans 649 500 , 649 500
Share-based payment | 223 30. 223 30
3,572 3,230 3,572 3,230
Niels Eldrup Meidahl (CFO):
Salary and fees 1,558 1,500 1,558 1,500
Bonus plans ' 499 300 499 300
Share-based payment 126. 18 126 18
2,183 1,818 2,183 . 1,818
Total ” 5,755 5,048 — 5,755 5,048
1410410E0GSN06304
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 44
Notes — Income statement
3 STAFF COSTS — CONTINUED
Guidelines for remuneration to the Board of Directors and Executive Board
The annual general meeting on 14 April 2011 adopted the existing "Guidelines for remuneration to the Board of Directors and Executive
Board, including general guidelines for incentive scheme for the Executive Board”. All remuneration for 2013 is determined in accord-
ance with these guidelines, The Board of Directors does not receive any form of incentive payment, and remuneration to the Executive
Board consists of a combination of fixed annual salary and a performance-based element comprising a short-term and long-term incen-
tive plan.
The maximum amount of incentive remuneration (short-term and long-term) that can be achieved in accordance with the annual pool of
incentive programmes, valued at the start of the vesting period for the annual pool, must not exceed 80% of the executive officer's fixed
annual salary in the financial year in question, based on valuation pursuant to IFRS.
Board of Directors
The Board of Directors comprised five members in the period up to the annual general meeting on 17 April 2013. Anders C Karlsson and
Henrik Lind resigned at the annual general meeting, and Kent Arentoft and Henriette Schåotze were elected as new members. The annual
general meeting on 17 April 2013 approved remuneration to the Chairman of the Board for 2013 of DKK 600,000 (2012: DKK 600,000)
and remuneration to ordinary board members of DKK 300,000 (2012: DKK 300,000). Remuneration to members of the Board of
Directors also covers committee work. The Board's committees currently comprise an Audit Committee, a Nomination Committee and
a Remuneration Committee.
The Executive Board of H+H International A/S may resign with six months" notice. The company may dismiss the Executive Board with
12 months' notice. Under normal circumstances, if the company gives notice to the Executive Board without reason, ihose concerned
are entitled to a termination benefit equivalent to 12 months' fixed salary. However, if a shareholder acquires the majority of votes in
the company as a result of a compulsory or voluntary offer in accordance with the rules governing this in the Danish Securities Trading
Act, or if the company's operations are transferred to a new owner, the period of notice the Executive Board must give the company is
shortened to three months for a period of two years. In a corresponding takeover situation, the company's Executive Board has a claim
to twice the termination benefit, equivalent to 24 months' fixed salary.
Cash-based incentive schemes
The Executive Board have the opportunity to earn an annual cash bonus. This is based on performance in relation to the achievement of
defined financial ratios for the company (key performance indicators such as EBIT, EBITDA, PBT, EPS, ROE, increase in share price etc.)
and/or defined individual performance criteria, economic or otherwise (e.g. execution of strategy, restructuring plans, R&D projects,
lean projects etc,). The bonus is therefore not guaranteed. In case of termination, for any reason, the person in question shall be entitled
to a pro rata bonus up to the date of termination.
SHARE-BASED INCENTIVE SCHEME
New matching share programme .
In May 2013 a matching share programme was launched for the Executive Board and certain key employees. The Executive Board and
key employees purchased a total of 20,316 shares at market price in May 2013, which will trigger allocation of a further 60,948 H+H
shares in May 2016 ff all of the vesting criteria are fulfilled.
The vesting criteria relate to employment in the vesting period, the Group's operating profit and other financial targets. The value of the
programme at inception in May 2013 is estimated at DKK 1.7 million and will be recognised as staff costs until the expiry of the vesting
period in May 2016.
The fair value of the programme has been determined as the maximum number of shares which can be granted. The share price used
in calculating the value of the programme is the share price at 30 April 2013. The programme is not hedged by purchase of treasury
shares.
Previous matching share programmes
Matching share programmes similar to the one described above were launched in May 2011 and June 2012. The vesting criteria relate
to employment in the vesting period, the Group's operating profit and other financial targets. The value of the 2011 programme at
inception in May 2011 was DKK 1.9 million, which is recognised as staff costs until the expiry of the vesting period in June 2014. One of
the employees covered by the programme left the Group in 2012 and part of the programme has therefore been reversed. Further, it was
assessed during 2013 that the programme could trigger a maximum of one matching share per purchased investment share, and the
amount recognised for the programme has been adjusted accordingly.
The value of the 2012 programme at inception in June 2012 was DKK 1.8 million, which is recognised as staff costs until the expiry of
the vesting period in June 2015. it was assessed during 2013 that the programme could trigger a maximum of one matching share per
purchased investment share, and the amount recognised for the programme has been adjusted accordingly.
Neither of the two programmes is hedged by purchase of treasury shares.
1410410EQ0GSN06305
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 45
Notes — Income statement
3 STAFF COSTS — CONTINUED
Previous option programme
in May 2007, the Board of Directors of H+-H International A/S established a share option plan for the Executive Board and other senior
executives with a vesting period of 2007-2009. No share option plan has been adopted for 2013. The Board of Directors of H+H Interna-
tional A/S is not included in the company's share option plan.
Each share option entitles the holder to buy one share in H+H. The exercise price is calculated as the average price in the 10 business
days after the publication of the annual report for the financial year to which the share options relate, plus 20%. The options are exercis-
able during a one-year period beginning three years and ending four years after the publication of the annual report for the financial year
to which the share options relate. Unless specifically agreed as part of a termination agreement, the right to be granted and to exercise
share options is conditional upon the option holder's employment with the company not having ceased, either due to the option holder
having given notice of termination or breach of contract on the part of the option holder. There are no other vesting conditions. The fair
value of the share option plan at the issue date has been calculated at DKK 4.5 million in total, and breaks down into DKK 1.5 million for
the 2007 grant, DKK 1.5 million for tne 2008 grant and DKK 1.5 million for the 2009 grant. The fair value of the programme at 31 Decem-
ber 2013 is DKK O million.
No hedging of the granted share options has been carried out in recent years as the relatively large drop in the company's share price
means that the probability of the oldest options still exercisable being used before expiry of ihe exercise period (March 2014) is consid-
ered very low. There were 20,489 treasury shares at year-end 2013 and 2012. The outstanding options have an average remaining con-
tractual life of 0 years (2012: 0.8 year) and an exercise price of DKK 79 per option (2012: DKK 79-93 per option). The cost recognised in
the 2013 income statement in respect of share options is DKK 16 thousand (2012: DKK 140 thousand).
Group
(DKK '000) Total Former Executive Board Other employees
Avg. exer- Avg. exer- Avg. exer-
Outstanding options Number cise price Number cise price Number cise price
Outstanding options at 31 December 2011 62,889 16,638 46,251
Additions o 0 0
Forfeited 0 0 0
Expired (29,007) i (8,088) (20,919)
Outstanding option plans at 31 December 2012 33,882 8,550 25,332
Additions 0 Q 0
Forfeited O 0 0
Expired ' (15,750) (4,275) (11,475)
Outstanding options at 31 December 2013 — 18,132 4,275 13,857
Breakdown of outstanding options by exercise period:
Outstanding option plans at 31 December 2012
2012-2013 15,750 93 4,275 93 11,475 93
2013-2014 18,132 79 4,275 79 13,857 79
Total 33,882 8,550 25,332
Outstanding option plans at 31 December 2013
2013-2014 18,132 79 4,275 79 13,857 79
Total 18,132 4,275 13,857 ”
141041Q0E0GSN06306
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 46
Notes — Income statement
3 STAFF COSTS — CONTINUED
"The internal rules for trading in H+H International A/S's shares by board members, executives and certain employees only permit
trading in the four-week period following each quarterly announcement.
Managementft's holding of shares in H+H International A/S
1 January 31 December Market
(DKK "000) 2013 Additions 2013 value"
Board of Directors:
Kent Arentoft 0 10,000 10,000 477
Asbjørn Berge 6,000 0 6,000 286
Stewart A Baseley 10,000 0 10,000 477
Pierre-Yves Jullien 0 0 o 0
Henriette Schitze o 0 0 0
16,000 10,000 26,000 1,240
Executive Board:
Michael Troensegaard Andersen 15,065 4,400 -19,465 928
Niels Eldrup Meidahl 9,367 1,435 10,802 515
24,432 5,835 30,267 1,443
Total 40,432 15,835 56,267 2,683
= Calculation of the market value is based on the quoted share price of DKK 47,70 atthe end of the year.
Accounting policies
The H+H Group's incentive schemes comprise a share option plan for senior executives and a matching share programme.
The value of services rendered by employees in return for option and share grants is measured at the fair value of the options and
shares. For equity-settled share options, the grant date fair value is measured and recognised in the income statement as staff costs
over the vesting period of the options and shares. The costs are set off directly against equity.
On initial recognition of the share options and shares, the number of options and shares expected to vest is estimated, cf. the service
condition described. The figure initially recognised is subsequently adjusted for changes in the estimate of the number of options and
shares expected to vest, so thatthe total recognition is based on the actual number of vested options and shares.
The fair value of the options and shares granted is estimated using an option pricing model. The calculation takes account of the terms
and conditions attached to the share options and shares granted.
4 OTHER OPERATING EXPENSES
Group Parent company
(DKK 000) 2013 2012 2013 2012
Extra energy tax . 0 908 ; 0 0
Special costs related to closure of business
units and employees made redundant 2,975 5,344 . 0 3,467
Expenses in connection with sale of H+H Geskå 0 0 0 7,176
Provision for closure of Jåmerå . 0 0. 0 5,789
Other ' 4,629 0 3,610 4,012
Total 7,604 6,252 ' 3,610 20,444
Other comprises costs related to implementation of the new strategy at DKK 3,610 thousand (2012:.DKK 3,880 thousand).
Accounting policies
Other operating expenses comprise items secondary to the entities' activities such as restructuring costs, losses on disposal of pro-
perty, plant and equipment, and losses related to divestment of subsidiaries and activities.
141041QE0GSR06307
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 47
Notes — Income statement
5 OTHER OPERATING INCOME
Group ' Parent company
(DKK 000) 2013 2012 2013 2012
Management fee 0 0 18,862 17,000
Gain on disposal of property, plant and equipment 6,376 4,246 461 0
Rental income 1,221 2,174 0 0
Adjustment of environmental provision 1,050 7,340 0 0
Gain on sale of H+H Ceskå O 5,732 o 0
Gain on sale ofthe Jåmerå trademark 0 0. o 5,921
Refund of property taxes ” 2,778 O o 0
Other 3,764 83 0 0
Total 15,189 19,575 19,323 22,921
FÅ Accounting policies
Other operating income comprises items secondary to the entities' activities such as management fee, rental income, gains on disposal
of property, plant and equipment, and gains related to divestment of subsidiaries and activities.
6 DEPRECIATION AND AMORTISATION
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Other intangible assets 4,240 3,409 1,252 1,252
Buildings 15,726 18,278 0 0
Plant and machinery ” 51,057 64,186 0 (9)
Fixtures and fittings, tools and equipment 15,719 14,257 143 169
Total 86,742 ' 100,130 1,395 1,421
7 IMPAIRMENT LOSSES
Group Parent company
(DKK "000) 2013 2012 2013 2012
Land and buildings ' 940 44,248 0 0
Write-down of equity investments 0 0 144,965 111,435
Reversal of previous write-down relating to assets in Russia 0 (103,782) 0 0
Impairment loss relating to goodwill in Poland i O 24,487 - 0 0
Impairment loss relating to goodwill in the Czech Republic 0 2,720 a 0
Total ' 940 (32,327) 144,965 111,435
The write-down of equity investmentis in the parent company for 2013 relates to H+H Finland Oy, Stone Kivitalot Oy, H+H Polska Sp. z
0.0., H+H Denmark and H+H Sweden and is based on the recoverable amount being lower than the parent company's original costs. In
2012 the write-down of equity investments related to H+H Polska Sp. z 0.0. and H+H Ceskå Republika s.r.0. The write-down of equity
investments in 2013 and 2012 has no bearing on the consolidated financial statements.
The reversal of the write-down relating to assets in Russia in 2012 was made in the light of favourable developments on the Russian
market.
An impairment loss relating to goodwill in Poland was recognised in 2012 as a result of lower capacity utilisation and prices than previ-
ously anticipated. Impairment losses relating to goodwill and land and buildings in the Czech Republic were recognised in 2012 in con-
nection with the sale of H+H Geskå republika s.r.0o.
1410410E0GS%06308
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 48
Notes — Income statement
8 FINANCIAL INCOME
Group Parent company
(DKK '000) 2013 2012 2013 2012
Interest income 123 98 O 0
Interest income from subsidiaries . o 0 20,572 21,453
Exchange rate adjustments relating to loans to subsidiaries 0 0 0 5,775
Dividends from subsidiaries o Q O 7,121
Other exchange rate adjustments 132 587 0 0
Reversal of write-down of intragroup debt 0 0 3,692 0
Other financialincome 26 886 O 0o
Total 281 1,571 24,264 34,349
ÆN Accounting policies
Financial income comprises interest income, capital gains, transactions denominated in foreign currencies, amortisation of financial
assets, and surcharges and allowances under the tax prepayment scheme etc.
Dividends from equity investments in subsidiaries are credited to the parent company's income statement in the financial year in which
they are declared.
9 FINANCIAL EXPENSES
Group Parent company
(DKK "000) 2013 2012 2013 2012
Interest expenses 29,673 31,728 13,731 12,695
Interest expenses to subsidiaries ” 0 0 2,631 2,899
Exchange rate adjustments relating to loans to subsidiaries 0 0o 2,678 0
Other exchange rate adjustments 1,829 1,446 316 538
Write-down of intragroup debt 0 0 0 12,897
Financial expenses relating to pension plans 6,211 7,754 0 0
Other financial expenses 5,041 3,548 4,528 3,682
… Total 42,754 44,476 23,684 32,711
Accounting policies
Financial expenses comprise interest expenses, capital losses, impairment losses relating to securities, payables and transactions in foreign
currencies, and amortisation of financial liabilities, including finance lease obligations etc.
Borrowing costs related to the financing of the production of the H+H Group's assets are recognised in the cost of the assets.
1410410E0GSN06309
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 49
Notes — Income statement
10 TAX
Group | Parent company
(DKK 000) 2013 2012 2013 2012
Tax on profit from continuing operations 3,520 29,550 0 0
Tax on other comprehensive income . (5,505) (2,423) 0 o
Total ' (1,985) - 27,127 . 0 0
Tax on continuing operations can be broken down as follows:
Current tax for the year 0 671 o O
Adjustment relating to changes in tax rate 116 ' (1,246) 0 0
Adjustment of deferred tax (2,156) 27,741 ' O 0
Prior-year adjustments 55 (39) 0 o
Total (1,985) 27,127 (s) 0
Current joint taxation contribution for the year o (sm 0 a
Tax on profit from continuing operations can be broken down as follows:
Calculated 25% (2012: 25%) tax on income from ordinary activities (8,422) (1,824) (28,739) (34,112)
Less tax in foreign Group entities compared with 25% rate (2012: 25%) (249) (6,185) 0 o
Tax effect of:
Unrecognised deferred tax asset 10,371 21,695 ' 3,306 6,251
Write-down of deferred tax asset 1,697 0 0 0
Other adjustmentis (2,543) 1,968 - o 0
Tax on other comprehensive income (5,505) (2,423) - 0 0
Non-deductible expenses 2,746 15,215 26,627 31,085
Prior-year adjustments 55 1,839 0 O
Non-taxable income (135) (3,158) ' (1,194) (3.224)
Total (1,985) 27,127 0 0
EM Accounting policies
Tax on profit comprises current tax and changes in deferred tax for the year. The portion that relates to profit for the year is recognised
inthe income statement, and the portion that can be attributed to items in other comprehensive income or directly in equity is recog-
nised in other comprehensive income or directly in equity.
H+H International A/S is taxed jointly with all its Danish subsidiaries. The current Danish income tax is allocated among the jointly taxed
companies in proportion to their taxable income, Subsidiaries that utilise tax losses in other subsidiaries pay joint taxation contributions
to the parent company equivalent to the tax base of the utilised losses, while subsidiaries with tax losses that are utilised by other sub-
sidiaries receive joint taxation contributions from the parent company equivalent to the tax base of the tax losses utilised (full absorp-
tion). The jointly taxed companies are taxed under the tax prepayment scheme.
Where the H+H Group receives a tax deduction in the calculation of taxable income in Denmark or abroad as a result of share-based
payment schemes, the tax effect of these schemes is recognised in tax on profit. If the total deduction exceeds the total remuneration
expense, the tax effect of the excess deduction is recognised directly in equity.
1410410E06GSN0€6310
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 50
Notes — Income statement
11 INCOME STATEMENT CLASSIFIED BY FUNCTION
it is Group policy to prepare the income statement based on an adapted classification of costs by function in order to'show earnings
before depreciation, amortisation and financial items (EBITDA). Depreciation, amortisation and impairment of property, plant and
equipment and intangible assets are therefore separated from individual functions and presented on separate lines.
The table below shows an extract of the income statement adapted to show depreciation, amortisation and impairment classified by
function:
Group Parent company
(DKK "000) 2013 2012 2013 2012
Revenue 1,260,070 1,223,627 0 o
Production costs . (1,079,917) (1,012,924) 0 0
Gross profit including depreciation and amortisation 180,153 210703 0 0
Sales and distribution costs (88,837) (90,822) O 0
Administrative costs (93,017) (97,596) (171,246) (140,563)
Other operating costs ' (7,604) (6,252) (3,610) (20,444)
Other operating income . 15,189 19,575 19,323 22,921
Earnings before interest and tax (EBIT) 5,884 35,608 — (155,533) (138,086)
Depreciation, amortisation and impairment comprise: .
Amortisation of intangible assets 4,240 3,409 1,252 1,252
Write-down of intangible assets ' 0 27,207 0 0
Depreciation of property, plant and equipment 82,502 96,721 143 169
Write-down of property, plant and equipment ” 940 44,248 0 0
Reversal of previous write-down on assets in Russia O (103,782) O 0
Write-down of equity investments 0 o. 144,965 111,435
Total ' 87,682 67,803 146,360 112,856
Depreciation, amortisation and impairment are allocated to:
Production costs 81,334 61,558 O 0
Sales and distributioncosts - ' 555 550 o 0
Administrative costs 5,793 5,695 146,360 112,856
Total : 87,682 67,803 146,360 112,856
Accounting policies
Revenue from the sale of goods for resale and finished goods is recognised in the income statement when delivery and transfer of risk to
the buyer have taken place, and if the income can be measured reliably and is expected to be received. Revenue is measured net of VAT
and duties collected on behalf of third parties. All types of discount and rebate granted are recognised in revenue.
Production costs comprise costs incurred in generating the revenue for the year. The trading entities recognise cost of sales and the
producing entities' production costs, corresponding to revenue for the year. This includes the direct and indirect cost of raw materials
and consumables, and wages and salaries.
Sales and distribution co$ts include costs of distribution of goods sold during the year as well as marketing costs etc. This includes
costs of sales personnel, and advertising and exhibition costs. Administrative costs include costs incurred during the year for manage-
ment and administration, including costs for administrative staff, office premises and office expenses. Administrative costs also include
impairment of trade receivables.
1410410E0GSN06311
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 51
Notes — Income statement
12 EARNINGS PER SHARE (EPS)
Group
(DKK 7000) 2013 2012
Average number of shares " 9,810,000 9,810,000
Average number of treasury shares (20,489) (20,489)
Average number of outstanding shares — 9,789,511 9,789,511
Dilution from share options . 0 0
Average number of outstanding shares, diluted 9,789,511 9,789,511
Adjustment of number of DKK 50 shares
Adjusted average number of outstanding shares 9,789,511 9,789,511
Adjusted average number of outstanding shares, diluted 9,789,511 9,789,511
Loss for the year | (92,473) (82,358)
Shareholders in H+H International A/S (92,473) (82,358)
Earnings per share (EPS) (DKK) (9.45) (8.41)
Diluted earnings per share (EPS-D) (DKK) (9.45) (8.41)
For earnings and diluted earnings per share from discontinued operations, see note 24.
Earnings per share from continuing and discontinued operations respectively for 2012 and 2013 are calculated on the basis of the equiv-
alent key figures used to calculate earnings per share.
Loss from discontinued operations ' (52,364) (45,511)
Loss from continuing operations (40,109) (36,847)
Loss for the year . (92,473) (82,358)
The calculation of diluted earnings per share excludes 18,132 share options (2012: 33,882) which are out of the money but may poten-
tially dilute earnings per share in the future.
In accordance with IAS 33, an adjustment has been made to the calculation of earnings per share (EPS) and diluted earnings per share
(EPS-D) such that the average number of shares has been adapted to a face value of DKK 50.
1410410E0GSN06312
Notes — Balance sheet
13 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 52
Parent company
(DKK 000) 2013 2012
Fixtures Fixtures
Other and fittings, Other and fittings,
intangible tools and intangible tools and
assets equipment assets equipment
Total cost ati January 6,262 1,020 6,262 1,102
Additions during the year 0 520 0 254
Disposals during the year 0 (346) 0 (336)
Total cost at 31 December 6,262 1,194 6,262 1,020
Total depreciation and amortisation at1 January (1,252) (563) 0 (514)
Depreciation and amortisation of assets disposed of o 124 0 120
Depreciation and amortisation for the year (1,252) (143) (1,252) (169)
Total depreciation and amortisation at 31 December (2,504) (582) (1,252) (563)
Carrying amount at 31 December 3,758 | 612 5,010 457
Group
(DKK 000) 2013
Property,
Fixtures plant and
Other and fittings, equipment
intangible Land and Plant and tools and under con-
Goodwill assets buildings machinery equipment struction
Total costati January 2013 84,107 29,726 519,564 1,238,900 271,072 23,541
Transfers 0 (17,008) 18,013 5,141 2,657 (8,803)
Foreign exchange adjustments, year-end rate (913) (235) (7,155) (33,337) (17,003) (411)
Additions during the year 0 266 42 15,371 7,882 12,346
Disposals during the year 0 (902) (9,839) (69,213) (10,467) 0
Transferred from assets held for sale 0 17,121 12,240 0 0 0
Transferred to assets held for sale 0 (3,214) (9,020) (6,657) (918) O
Total cost at 31 December 2013 83,194 25,754 523,845 1,150,205 253,223 26,673
Total depreciation and amortisation at 1 January 2013 (25,045) (17,891) (174,007) (793,801) (116,382) (7,933)
Transfers 0 2,042 (2,042) o 0 0
Foreign exchange adjustments, year-end rate 410 152 ” 1,386 12,053 4,631 0
Foreign exchange adjustments for the year O (14) 5 730 500 0
Depreciation and amortisation of assets disposed of 0 940 9,501 68,512 8,063 0
Depreciation and amortisation for the year 0 (4,240) (15,726) (51,057) (15,719) 0
Impairment losses for the year 0 O (940) O 0 0
Transferred from assets held for sale 0 (2,074) (1,473) 0 0 oOo
Transferred to assets held for sale 0 0 866 1,538 224 o
Total depreciation, amortisation and impairment
losses at 31 December 2013 (24,635) (21,085) (182,430) (762,025) (118,683) (7,933)
Carrying amount at 31 December 2013 58,559 4,669 341,415 388,180 134,540 18,740
1410410E0GSN06313
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 53
Notes — Balance sheet
13 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT — CONTINUED
Group
(DKK 000) 2012
Property,
Fixtures plant and
Other and fittings, equipment
intangible Land and Plant and tools and under con-
- Goodwill assets buildings machinery equipment struction
Total costati January 2012 81,773 29,631 560,242 1,333,911 263,674 16,291
Transfers 0 1,552 2,003 278 2,816 (6,649)
Foreign exchange adjustments, year-end rate 5,058 676 24,174 38,221 7,732 107
Additions during the year 0 752 983 6,345 5,118 13,814
Disposals during the year 0 (462) (254) (6,651) (8,268) (22)
Disposals relating to divestment of subsidiary (2,724) (2,423) (56,009) (132,344) 0 o
Transferred to assets held for sale 0 o (11,575) (860) 0 O
Total cost at 31 December 2012 84,107 29,726 519,564 1,238,900 271,072 23,541
Total depreciation and amortisation at 1 January 2012 0 (16,294) (162,040) (826,274) (140,170) (7,933)
Transfers 0 (185) O 0 185 0
Foreign exchange adjustments, year-end rate 0 46 (4,686) (18,463) (3,970) 0
Foreign exchange adjustments for the year (562) i (118) (131) (69) 0
Depreciation and amortisation of assets disposed of 0 259 88 6,301 6,272 o
Depreciation and amortisation for the year 0 (3,513) (19,090) (65,719) (14,555) 0
Impairment losses for the year (27,207) 0 (44,248) 0 0 0
Reversal of write-down 0 0 0 67,857 35,925 0
Disposals relating to divestment of subsidiary 2,724 1,795 56,087 42,628 0 0
Total depreciation, amortisation and impairment
losses at 31 December 2012 (25,045) (17,891) (174,007) (793,801) (116,382) (7,933)
Carrying amount at 31 December 2012 59,062 11,835 345,557 445,099 154,690 15,608
Impairment test of goodwill
On 31 December 2013, management tested the carrying amount of goodwill for impairment based on the allocation of the cost of
goodwill to the cash-generating units. Management is of the opinion that the lowest level of Ccash-generating unit to which the carrying
amount of goodwill can be allocated is in each country.
The recoverable amount was defined as the value in use for the purpose of impairment testing. Ingeneral the impairment tests were
based on the budget and strategy projections as approved by management.
DKK 28,260 thousand (2012: DKK 28,260 thousand) of the goodwill relates to Germany and DKK 30,299 thousand (2012: DKK 30,802
thousand) to Poland.
The assumptions used for the impairment tests are the same as those used in the impairment tests for non-current assets and are
shown on page 54,
Average annual growth has been assessed by local and Group management. The growth rate is not expected to exceed the average
long-term growth rate in the H+H Group's markets. An increasing gross margin has been estimated for the period 2014-2019, after
which it is expected to be constant. The rising gross margin assumes more expedient utilisation of production capacity as well as price
increases.
The WACC is based on generally recognised principles including the determination of return on equity and cost of debt as well as as-
sumptions provided by external analysts.
The return on equity is estimated on the basis of information provided by an independent survey performed by the IESE Business
School regarding the market risk premium and the risk-free rate for the relevant countries. Furthermore, the beta value is the same as
that used by the analysts covering the H+H share. The cost of debt is estimated based on the actual margin in the bank agreements and
the risk-free rate.
141.0410EQGSN06314
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 54
Notes — Balance sheet
13 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT — CONTINUED
Based on the assumptions above, management considers the recoverable amount to exceed the carrying amount of goodwill. However,
ifthe main assumptions are not met, this could result in indications of impairment. The main assumptions relate to annual growth in
revenue and gross margin.
In 2012 the impairment test of goodwill showed indications of impairment of DKK 24 million relating to goodwillin Poland, which is dis-
cussed in more detail below. After recognising an impairment loss on goodwill in Poland and based on the assumptions above, manage-
ment considers the recoverable amount to exceed the carrying amount of goodwill. If the assumptions are not met, this could result in
further indications of impairment. The main assumptions relate to annual growth in revenue and gross margin. The primary reason for
the impairment loss relating to goodwill in Poland is a generally greater slowdown in the Polish market for building materials than anti-
cipated, and the fact that the Polish market is characterised by significant overcapacity and low prices. Continued cyclical difficulties in
the market and increased competition have resulted in significant losses in the Polish subsidiary in recent years.
DKK 30,299 thousand (2012: DKK 30,802 thousand) of the total goodwill of DKK 58,559 thousand (2012: DKK 59,062 thousand) at
31 December 2013 relates to the Eastern European segment and DKK 28,260 thousand (2012: DKK 28,260 thousand) to the Western
European segment.
Impairment tests of non-current assets
The Group's key non-current assets were tested for impairment in 2013, including with regard to assets in Poland, Germany, the UK and
Russia, which together represent approx. 88% of the Group's total non-current assets at 31 December 2013.
The impairment tests of non-current assets performed at 31 December 2013 do not show any indications of impairment. However, as
a result of the economic situation for the Group, there is a particular risk that the future will bring further indications of impairment in
some subsidiaries. The assets in Poland are the most exposed to impairment in relation to the assumptions mentioned above. Based on
these assumptions, management considers the recoverable amount to exceed the carrying amount of property, plant and equipment.
lfthe assumptions above are not met, this could result in indications of impairment. The main assumptions relate to annual growth in
revenue and gross margin.
The assumptions made can be summarised as follows:
2013
Poland Germany i UK Russia?
Carrying amount of property, plant and equipment at
31 December 2013 (DKK 000) 223,718 251,013 181,471 243,023
Estimated average annual growth in revenue 2014-2019 (CAGR) 7.3% 4.4% 4.9% 7.0%
Estimated gross margin 2014-2019 ' 10-22% 21% 21-24% 37-38%
WACC, after tax | 8.5% 6.0% 6.6% 10.5%
2012
Poland Germany UK Russia”
Carrying amount of property, plant and equipment at
31 December 2012 (DKK 7000) 241,357 246,905 205,298 248,900
Estimated average annual growth in revenue 2013-2018 (CAGR) 13.7% 1.5% 6.3% 15.7%
Estimated gross margin 2013-2018 6-19% 20-22% 19-20% 40-42%
WACE, after tax 9.3% 5.7% 6.1% 12.6%
= For Russia the forecast period has been extended to 2022, CAGR for the period 2013-2022 is 11.3%,
The WACC after tax in Poland is decreased from 2012 to 2013 due to a decrease in the risk-free rates from 4.7% to 3.9% and a minor de-
crease in the market premium from 6.4% to 6.3%.
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ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 55
Notes — Balance sheet
13 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT — CONTINUED
On 31 December 2013 the recoverable amount for the cash-generating unit Poland (including goodwill) is DKK 18 million higher than the
carrying amount. Almost any negative change in the assumptions will necessitate further impairment losses. The very sensitive analysis
for Poland indicates the following adverse consequences:
= If average annual growth in revenue in the period 2014-2019 (CAGR) were to be reduced by 1,0 percentage point to 6.9%, this would
necessitate impairment losses of DKK 24 million.
m IfWACC after tax were to be increased by 1.0 percentage point to 9.5%, this would necessitate impairment losses of DKK 24 million.
= If the annual growth rate in the residual period were to be reduced by 0.5 percentage point to 2.5%, this would not necessitate an impair-
ment loss. If the annual growth rate in the residual period were to be reduced by 1.0 percentage point to 2.0%, this would necessitate
impairment losses of DKK 13 million.
m= If the annual growth rate in the residual period were to be reduced by 1.0 percentage point to 2.0% and WACC after tax were to be
increased by 1.0 percentage point to 9.5%, this would necessitate impairment losses of DKK 46 million.
BEA Accounting policies
Intangible assets
Goodwill is recognised initially in the balance sheet at cost. Subsequent to initial recognition, goodwill is measured at cost less accumu-
lated impairment losses. Goodwill is not amortised. On acquisition, goodwill is allocated to the cash-generating units which subse-
quentliy form the basis for impairment testing. Goodwill and fair value adjustments in connection with the acquisition of a foreign entity
with a functional currency other than the H+H Group's presentation currency are accounted for as assets and liabilities belonging to the
foreign entity and translated on initial recognition into the foreign entity's functional currency at the exchange rate at the transaction
date. Any excess of the fair value over the cost of acquisition (negative goodwill) is recognised in the income statement at the date of
acquisition.
The carrying amount of goodwill is allocated to the H+H Group's cash-generating units at the date of acquisition. The determination of
cash-generating units follows the H+H Group's organisational and internal reporting structure.
Other intangible assets comprise patents/licences and development projects. Development projects that are clearly defined and
identifiable, and for which technical feasibility, adequate resources and a potential future market or an application in the entity can be
demonstrated, and which the entity intends to manufacture, market or use, are recognised as intangible assets if the cost can be de-
termined reliably and if there is reasonable certainty that the future earnings or the net selling price will cover production costs, selling
costs, administrative expenses and development costs. Other development costs are recognised in the income statement as incurred.
Recognised development costs are measured at cost less cumulative amortisation and impairment losses. Cost comprises salaries,
amoriisation and other expenses attributable to the H+H Group's development activities and interest expenses on loans to finance the
production of development projects that relate to the production period. On completion of the development work, development projects
are amortised on a straight-line basis over the estimated economic useful life from the date the asset is available for use. The amortisa-
tion period is normally 5-10 years. The amortisation base is reduced by any impairment losses.
Patents and licences are measured at cost less cumulative amortisation and impairment losses. Patents and licences are amortised on
a straight-line basis over the shorter of the remaining patent or contract period and the useful life. The amortisation base is reduced by
any impairment losses. Other intangible assets are amortised on a straight-line basis over the expected useful lives of the assets.
Property, plant and equipment
Land and buildings, plant and machinery, fixtures and fittings, and tools and equipment are measured at cost less accumulated depre-
ciation and impairment losses.
Cost comprises purchase price and any costs directly attributable to the acquisition up to the date the asset is available for use. The
cost of self-constructed assets comprises direct and indirect costs of materials, components, subsuppliers and labour. Cost is incre-
ased by estimated costs for dismantling and removal of the asset and restoration costs, to the extent that they are recognised as a pro-
vision, and interest expenses on loans to finance the production of property, plant and equipment that relates to the production period.
The cost of a combined asset is divided into separate components that are depreciated separately if the components have different
useful lives.
Inthe case of assets held under finance leases, cost is determined at the lower of the assets' fair value and the present value of the
future minimum lease payments. In determining the present value, the interest rate implicit in the lease or the H+H Group's incremental
borrowing rate is used as the discount rate.
141041QE0GSNQ€6316
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 56
Notes — Balance sheet
13 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT — CONTINUED
Subsequent costs, for example in connection with replacement of part of an item of property, plant or equipment, are recognised in the
carrying amount of the asset if it is probable that future economic benefits will flow to ihe H+H Group from the expenses incurred. The
replaced part is derecognised in the balance sheet, and the carrying amount is transferred to the income statement. All other expenses
for general repair and maintenance are recognised in the income statement as incurred.
Property, plant and equipment are depreciated on a straight-line basis over the expected useful lives of the assets as
follows:
Buildings 10-50 years
Plant and machinery 2-20 years
Fixtures and fittings, tools and equipment 2-10 years
Intangible assets 3-35 years
Land is not depreciated
The depreciation base is determined taking into account the asset's residual value and is reduced by any impairment losses. The resid-
ual value is determined at the date of acquisition and reviewed annually. Depreciation ceases if the residual value of an asset exceeds
its carrying amount. The effect on depreciation of any changes in depreciation period or residual value is recognised prospectively as a
change in accounting estimates.
VAN Critical accounting estimates and judgements
Impairment of non-current assets
Goodwill is tested for impairment annually, the first time before the end of the year of acquisition. The carrying amount of goodwillis
tested for impairment together with the other non-current assets of the cash-generating unit to which the goodwill has been allocated,
and written down to the recoverable amount in tne income statement if the carrying amount exceeds the recoverable amount. As arule,
the recoverable amount is determined as the present value of the expected future net cash flows from the entity or activity (cash-
generating unit) to which the goodwill relates.
The carrying amounts of other non-current assets are reviewed annually to determine whether there is any indication of impairment. If
any such indication exists, the asset's recoverable amount is estimated. The recoverable amount of an asset is the higher of its fair value
less expected disposal costs and its value in use. The value in use is determined as the present value of expected future cash flows from
the asset or the cash-generating unit to which the asset belongs.
An impairment loss is recognised whenever the carrying amount of an asset or cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement under depreciation and amortisation.
Impairment losses relating to goodwill are not reversed. Impairment losses relating to other assets are reversed to the extent that the
assumptions or estimates that led to the impairment loss have changed. Impairment losses are only reversed to the extent that the as-
set's new carrying amount does not exceed the value the asset would have had after depreciatjon/amortisation if no impairment losses
had been charged.
The calculation for impairment testing is based on budgets approved by management. Cash flows after the budget period are extra-
polated using individual growth rates. The discount rate used for the calculation incorporates possible impacts of future risks.
Useful lives of production assets
The expected useful lives of production assets are determined based on historical experience and expectations concerning the future
use of these assets. The expected future applications may subsequently prove not to be realisable, which may require useful lives to
be reassessed. The Group has reassessed estimates of the useful lives for 2013. The expected useful lives of production assets are
unchanged from 2012.
14 DEFERRED TAX
Group Parent company
(DKK "000) -2013 2012 2013 2012
Deferred tax at1 January (4,305) 23,922 (7.264) (7,264)
Foreign exchange adjustments (662) (252) 0 o
Change in deferred tax 2,527 (32,013) 0 0
Tax effect of adjustment of accumulated actuarial losses 1,285 4,038 ” 0 0
Deferred tax at 31 December (1,155) (4,305) (7,264) (7,264)
1410410E0GSN06317
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 57
Notes — Balance sheet
14 DEFERRED TAX — CONTINUED
Group ' Parent company
(DKK 7000) 2013 2012 2013 2012
Deferred tax relates to:
Non-current assets (70,806) (68,214) 0 0
Current assets (22) (48) 0 0
Liabilities 32,705 23,875 0 o
Retaxation balance relating to discontinued joint taxation 0 0 (7,264) (7,264)
Tax loss carry-forwards | 36,968 40,082 0 0
Total (1,155) (4,305) - (7,264) (7,264)
Breakdown of deferred tax and recognition in the balance sheet:
Deferred tax assets 16,338 13,728 o 0
Deferred tax liabilities (17,493) (18,033) ” (7,264) (7,264)
Total (1,155) (4,305) (7,264) (7,264)
No provision has been made in respect of deferred tax in connection with the share option plan, as the price of the shares at the balance
sheet date was lower than the exercise price of the options.
No deferred tax has been recognised on the difference between the cost of equity investmenis and the estimated fair value. This is
because the shareholdings in the equity investmenis are all considered to be "shares in a subsidiary”, and any gain/loss is therefore not
taxable.
The tax value of loss carry-forwards has been recognised as deferred tax assets in the companies where, based on budget, it is consid-
ered likely that this can be utilised in future earnings, and a history of profit before tax within the last three years has been verified. The
tax value of loss carry-forwards of DKK 71 million at 31 December 2013 (2012: DKK 48 million) has not been recognised as deferred tax
assets, as these are not considered likely to be utilised.
SÅ. Accounting policies .
Income tax and deferred tax: Current tax payable and receivable is recognised in the balance sheet as tax computed on the taxable
income for the year, adjusted for tax on the taxable income of prior years and for tax paid on account.
Deferred tax is measured using the balance sheet liability method, providing for all temporary differences between the carrying amount
and tax base of assets and liabilities. However, the following temporary differences are not recognised: goodwill not deductible for tax
purposes and other items — apart from business combinations — where temporary differences have arisen at the date of acquisition that
affect neither profit nor taxable income. Where alternative tax rules can be applied to compute the tax base, deferred tax is measured on
the basis of management's planned use of the asset or settlement of the liabitity respectively.
Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised as other non-current assets at the value at which
they are expected to be utilised either by elimination against tax on future earnings or by set-off against deferred tax liabilities within the
same legal tax entity and jurisdiction.
Deferred tax assets and liabilities are offset ifthe H+H Group has a legally enforceable right to offset current tax liabilities and assets or
intends to settle current tax liabilities and assets on a net basis or to realise tax assets and liabilities simultaneously. Adjustment of de-
ferred tax is made in respect of elimination of unrealised intragroup profits and losses.
Deferred tax is measured on the basis of the tax rules and at the tax rates that will apply under the legislation enacted at the balance
sheet date inthe respective countries when the deferred tax is expected to crystallise in the form of current tax. Changes in deferred tax
as aresult of changes in tax rates are recognised in the income statement.
Under the joint taxation rules, H+H International A/S, as the administration company, becomes liable to the tax authorities for the sub-
sidiaries' income taxes as the subsidiaries pay their joint taxation contributions. Joint taxation contributions payable and receivable are
recognised in the balance sheet under receivables/payables from Group entities.
VAN Critical accounting estimates and judgements
Recovery of deferred tax assets. Deferred tax assets are recognised for all unutilised tax loss carry-forwards to the extent itis consid-
ered likely that the losses can be offset against taxable income in the foreseeable future. The amount recognised for deferred tax assets
is based on estimates of the likely date and size of future tax loss carry-forwards.
1410410E0GSN06318
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 58
Notes — Balance sheet
15 INVESTMENTS IN SUBSIDIARIES
. Parent company
(DKK "000) 2013 2012
Acquisition cost at 1 January 1,221,585 1,307,300
Additions 58,933 25,261
Disposals ; (4,912) (110,976)
Cost at 31 December — 1,275,606 1,221,585
Impairment losses at 1 January (330,036) (272,892)
Reversal in connection with disposals 0 54,292
Reversal of previous write-down ' 0 52,610
Impairment losses, equity investments (144,965) (164,045)
Impairment losses at 31 December (475,001) (330,035)
Garrying amount at 31 December . 800,605 891,550
The cost of investments in subsidiaries was tested for impairment at the end of 2013. The recoverable amount of the equity invest-
ments at 31 December 2013 is based on the value in use, which has been determined using expected net cash flows based on estimates
for the years 2014-2019 and a WACC after tax of 6.0-10.5% (2012: 5,7-12.6%). The weighted average growth rate used for extrapolat-
ing expected future net cash flows for the years after 2018 has been estimated at 2.0-3.0% (2012: 2.0-4.0%). ltis estimated that the
growth rate will not exceed the long-term average growth rate in the respective company's markets.
-In connection with the closing of the financial statements for 2013, it was found that the recoverable amount of some of the Group's
Companies was lower than the parent company's original cost. As a result, impairment losses of DKK 145 million were recognised in the
parent company financial statements; see note 7.
2013 2012
Equity Equity
Registered office interest,% — interest, %
KWAY Holding Limited= UK 100 100
H+H Deutschland GmbH Germany 100 100
H+H Danmark A/S Denmark ; 100 100
HHI A/S af 3. maj 2004 Denmark 100 100
H+H Finland Oy Finland . 100 100
Stone Kivitalot Oy Finland 100 100
H+H Sverige AB Sweden | 100 100
H+H Norge AS Norway 100 100
H+H Polska Sp. Z 0.0. Poland 100 100
H+H EIQ s.r.0o. ” Czech Rep. 100 100
H+H Slovenskå republika s.r.o. Slovakia 100 100
H+H Ukraina TOV Ukraine | 100 100
H+H UA TOV Ukraine , 100 100
000 H+H Russia 100 100
H+H Belgien SPRL Belgium , — 100 100
H+H Benelux BM. Netherlands : 100 100
Diverse af 29.9.2011 ApS Denmark " 100 100
The above list does not include indirectly owned companies without any activities.
= This activity comprises ownership of H+H UK Holding Limited and thus the activities of H+H UK Limited.
Accaunting policies
Equity investments in subsidiaries in the parent company's financial statements. Equity investments in subsidiaries are measured at
cost. If there is any indication of impairment, an impairment test is carried out as described in note 13. Cost is written down to the re-
coverable amount whenever the carrying amount is higher.
1410410E0GSN06319
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 59
Notes — Balånce sheet
16 INVENTORIES/PRODUCTION COSTS
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Raw materials and consumables ' 42,829 49,705 0 0
Finished goods and goods for resale 123,373 144,508 0 o
Total . 166,202 194,213 " 0 0
Write-downs recognised in the inventories
above have developed as follows: :
Write-downs at i January 10,715 6,500 0 0
Foreign exchange adjustments (157) 88 0 0
Write-downs for the year . 3,982 4,431, 0 0
Realised during the year (281) (140) 0 (8)
Reversals (45) (164) 0 o
Transferred to assets held for sale (5,155) 0 - 0 0
Total 9,059 10,715 . 0 O
Production costs comprised: .
Wages and salaries 157,643 151,91 0 0
Production overheads 88,428 78,787 0 0
Cost of sales 748,575 716,401 - 0 0
Write-downs for the year 3,982 4,431 | 0 o
Reversals of inventory write-downs (45) (164) 0 O
Total 998,583 951,366 | 0 O
Accounting policies
Inventories are measured at cost using the FIFO method. Where the net realisable value is lower than the cost, inventories are writ-
ten down to this lower value. In the case of goods for resale, and raw materials and consumables, cost comprises purchase price plus
expenses incurred in bringing the inventories to their existing location and condition.
In the case of finished goods and work in progress, cost comprises raw materials, consumables, direct labour and production over-
heads. Production overheads comprise indirect materials and labour as well as maintenance and depreciation of the machinery, factory
buildings and equipment used in the production process, and the cost of factory administration and management.
The net realisable value of inventories is determined as the selling price less any costs of completion and costs incurred to execute the
sale. The net realisable value is determined on the basis of marketability, obsolescence and developments in expected selling price.
VAN Critical accounting estimates and judgements
Estimation uncertainty relates to write-downs to net realisable value. Inventories are generally written down in accordance with the
Group's policies in this area, which comprise individual assessment of inventories with a view to possible losses as aresult of obsoles-
cence, quality and cyclical effects.
1410410E0GSWN06320
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 60
Notes — Balance sheet
17 TRADE AND OTHER RECEIVABLES
Group -Parent company
(DKK 7000) 2013 2012 2013 2012
Trade receivables 39,393 22,695 ” 0 0
Other receivables 13,977 16,024 … 418 540
Total 53,370 38,719 , 418 540
Group Parent company
(DKK 000) 2013 2012 2013 2012
Age analysis of trade receivables:
Not past due 27,766 15,128 " 0o 0
0-30 days 9,840 5,640 0 O
30-90 days- 1,673 1,211 0 o
Over 90 days . 114 716 0 0
Total trade receivables 39,393 22,695 0 o
Write-downs relating to receivables, year-end 4,939 4,513 0 o
Write-down of receivables by geographical region Group
[DKK "000) 2013 2012
Western Eastern Western Eastern
Europe Europe Total Europe Europe Total
Write-downs at 1 January 2,394 2,119 4,513 2,346 2,800 5,146
Foreign exchange adjustmenis G0- (26) (57) 21 26 47
Write-downs for the year 1,086 1,116 2,202 770 97 867
Realised during the year (601) (64) (665) (616) (554) (1,170)
Reversals (935) 0 (935) (127) (250) (377)
Transferred to assets held for sale ' (119) 0 (119) - -— -—
Write-downs relating to receivables at 31 December 1,794 3,145 -4,939 2,394 2,119 4,513
The parent company has no trade receivables and there have not been any write-downs of receivables for 2013 or 2012.
Other receivables include VAT, other indirect taxes etc. and fall due within one year of the balance sheet date.
Receivables that are not past due are predominantly deemed to have a high credit quality. Security is not normally required in respect of
claims. The Group's customers are typically large well-consolidated builders' merchants and housebuilders, and customers are credit
rated on a regular basis. Only limited security had been provided at 31 December 2013.
Trade receivables which were past due at 31 December 2013 but not impaired are also included, as follows:
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Maturity period of trade receivables: i
0-30 days — 9,840 5,640 0 0
30-90 days 1,673 1,211 0 0
Over 90 days 0 0” 0 0
Total ' 11,513 6,851 0 0
141041QEQ0GSN06321
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 61
Notes — Balance sheet
17 TRADE AND OTHER RECEIVABLES — CONTINUED
EA Accounting policies
Receivables are measured at amortised cost, which in all material respects corresponds to the nominal value less write-downs for bad
and doubtful debts. A write-down for bad and doubtful debts is recorded if there is an objective indication of impairment on a receivable,
| in which case the impairment loss is determined individually. Receivables that have been found not to be individually impaired are tested
for impairment in groups. Impairment losses are calculated as the difference between the carrying amount and the present value of the
estimated future cash flows, including the realisable value of any collateral received. The discount rate applied is the effective interest
rate on the individual receivable. Write-downs and losses on receivables are recognised as other external expenses.
Prepayments recognised under assets comprise expenses incurred in respect of subsequent financial years. Prepayments are measur-
ed at amortised cost,
FAN Critical accounting estimates and judgements
Management currently makes estimates in assessing the recoverability of receivables at the balance sheet date. The international
financial situation has been taken into consideration in the assessment of write-downs at the balance sheet date and in the day-to-day
management and control of receivables.
18 SHARE CAPITAL AND TREASURY SHARES
Number Nominal value, DKK '000
2013 2012 2013 2012
Share capital at 1 January — 9,810,000 9,810,000 490,500 490,500
Share capital at 31 December — fully paid — 9,810,000 9,810,000 490,500 490,500
The share capital comprises 9,810,000 shares of nominal value DKK 50. All the shares have the same rights, with each share carrying 10
votes at the general meeting.
There have been no movements in the share capital in the last five years except for a capital increase in 2009 of DKK 436,000 thou-
sand.
Treasury shares
Nominal! value, % of share
Number DKK'000 capital, year-end
Holding at1 January 2012 20,489 . 1,024 0.2
Purchased during the year 0 0 0
Sold during the year 0 0 0
Holding at 31 December 2012 20,489 1,024 0.2
Purchased during the year 0 0 0
Sold during theyear ' 0 0 0
Holding at 31 December 2013 20,489 1,024 2
All the treasury shares are owned by H+H International A/S. Treasury shares are acquired in order to hedge liabilities related to the
company's option plans.
At 31 December 2013 a total of 18,132 shares are required in connection with the company's option plan (2012: 33,882 shares). Manage-
ment has chosen not to hedge all the outstanding options as it is unlikely that all the options will be exercised. The company's matching
share programme is not hedged by treasury shares.
EA Accounting policies
Equity: Proposed dividends are recognised as a liability atthe date of adoption at the annual general meeting (declaration date).
Treasury shares: Acquisition costs, disposal costs and dividends relating to treasury shares are recognised directly in retained earnings
under equity. Capital reductions on the cancellation of treasury shares reduce the share capital by an amount equivalent to the nominal
value of the shares. Proceeds from the sale of treasury shares in H+H International A/S in connection with the exercise of share options
are taken directly to equity.
1410410E0GSN06322
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 62
Notes — Balance sheet
19 PENSION OBLIGATIONS
Under defined contribution plans, the employer is obliged to pay a specific contribution (e.g. a fixed amount or a fixed percentage of sal-
ary). Under defined contribution plans, the Group does not bear the risk associated with future developmenis in interest rates, inflation,
mortality and disability.
Under defined benefit plans, the employer is obliged to pay a specific amount (e.g. a retirement pension as a fixed amount or a fixed
percentage of final salary). Under defined benefit plans, the Group bears the risk associated with future developments in interest rates,
inflation, mortality and disability.
The Danish entities' pension obligations are insured. Some foreign entities' pension obligations are also insured. Foreign entities that
are not insured or only insured in part (defined benefit plans) calculate the obligation aåctuarially at present value at the balance sheet
date. These pension plans are fully or partly funded in pension funds for the employees, In the consolidated financial statements, an
amount of DKK 156,914 thousand (2012: DKK 167,401thousand) has been recognised under liabilities in respect of the Group's obliga-
tions to existing and former employees after deduction of the assets associated with the plans.
In the consolidated income statement, an amount of DKK 9,640 thousand (2012: DKK 9,544 thousand) has been recognised in respect
of expenses relating to insured plans (defined contribution). For non-insured plans (defined benefit plans), an amount of DKK 6,211 thou-
sand (2012: DKK 7,754 thousand) has been recognised in the consolidated income statement as financial expenses.
The Group has defined benefit plans in the UK and Germany. The UK pension plans are managed by a pension fund — legally separate
from the company — to which paymenis are made, whereas the German pension plans are unfunded. The board of the pension fund is
Ccomposed of two representatives appointed by the employer, two elected by the pension fund members and two professional independ-
ent members.
The board of the pension fund is required by law and by articles of association to actin the interest of the pension fund members. The
board of the pension fund is responsible for the investment policy with regard to the plan assets. Under the pension plan, employees
are entitled to post-retirement annual payments amounting to 1/60 of the final pensionable salary for each year of service before the
retirement age of 65.1n addition, the service period is limited to 40 years, resulting in a maximum yearly entitlement (lifetime annuity)
of 2/3 of the final pensionable salary.
The defined benefit pension fund in the UK typically exposes the company to actuarial risks, such as investment, interest rate, inflation
and longevity. H+H Celcon Pension Fund is supervised by an independent corporate trustee, H+H Celcon Pension Fund Trustee Limited.
In accordance with the legislation governing pension funds, the corporate trustee must ensure among other things that a limited actu-
arial calculation of the pension obligations is carried out each year and a more detailed actuarial calculation of the pension obligations
every three years, A detailed actuarial calculation carried out in April 2011 showed an unfunded pension obligation of DKK 169 million
(GBP 20.4 million). Based on this calculation, on 16 August 2012 H+H UK Limited and H+H Celcon Pension Fund Trustee Limited entered
into an agreement on the payment of contributions to cover the unfunded pension obligation (Schedule of Contributions). The agree-
ment sets out a 12-year repayment profile under which H+H UK Limited will pay DKK 19 million (GBP 2.17 million) per year in the period
April 2011 — March 2024,
The pension fund was closed to new entrants in June 2007 and to the accrual of future service benefits in December 2011. The link to
final salary ended at this point.
1410410E0GSR06323
ANNUAL REPORT 2013 b FINANCIAL STATEMENTS 63
Notes — Balance sheet
19 PENSION OBLIGATIONS — CONTINUED
The most recent actuarial valuations (based on IAS 19R) of plan assets and the present value of the defined benefit obligation were car- '
ried out at 31 December 2013 by Mr C Richards, Fellow of the UK Institute of Actuaries, and in Germany by AON. The present value of the
defined benefit obligation, and the related service and past service cost, were measured using the "projected unit credit method”.
The pension fund has been replaced by a defined contribution pension scheme where the company is not subject to any ongoing invest-
ment, interest rate or longevity risk.
Group
(DKK "000) 2013 2012
Pensions and similar obligations:
Present value of fully or partly funded defined benefit plans ' 567,367 560,480
Fair value of plan assets ' 420,073 402,821
Deficit 147,294 157,659
Present value of unfunded defined benefit plans recognised in the balance sheet 9,618 9,742
Net obligation recognised in the balance sheet 156,912 167,401
Development in present value of defined benefit obligation:
Obligation at 1 January 570,222 513,286
Foreign exchange adjustments (12,311) 13,002
Calculated interest on obligation 23,607 25,434
Gains/losses as a result of changes in economic assumptions 11,304 45,387
Gains/losses as a result of changes in demographic assumptions 4,304 (9,514)
Empirical changes 147 1,721
Pension paid (20,288) (19,094)
Obligation at 31 December 576,985 570,222
Breakdown of the present value of defined benefit obligation:
Present value of fully or partly funded defined benefit obligations 567,367 560,480
Present value of unfunded defined benefit obligations . 9,618 9,742
Obligation at 31 December 576,985 570,222
141041QE0GSR06324
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 64
Notes — Balance sheet
19 PENSION OBLIGATIONS — CONTINUED
. . . . Group
(DKK "000) 2013 2012
Development in fair value of plan assets:
Plan assets at 1 January 402,821 349,094
Foreign exchange adjustments (8,504) 8,890
Calculated interest income . 17,396 17,680
Return on plan assets over and above the calculated interest 9,492 25,166
The company's contributions to plan assets 19,045 20,579
Pensions paid (20,177) (18,588)
Plan assets at 31 December 420,073 402,821
Pension costs relating to the current financial year, recognised as staff costs: .
Pension costs relating to defined contribution plans NE 9,640 3,543
Total pension costs 9,640 9,543
Financial costs relating to the defined benefit plans for the current year:
Calculated interest on obligation (23,607) (25,434)
Calculated interest on plan assets 17,396 17,680
Net interest on defined benefit plans . (6,211) (7,754)
Pension costs recognised in other comprehensive income:
Gains/losses as aresult of change in economic assumptions (11,304) (47,208)
Gains/losses as a result of change in demographic assumptions ' (4,304) 9,514
Return on plan assets over and above the calculated interest 9,492 25,166
Changes due to experience adjustment (147) (1,721)
Total (6,263) (14,249)
The cost has been recognised in the income statement under staff costs; see note 3. Costs recognised under production costs amount
to DKK 5,662 thousand (2012: DKK 5,552 thousand), costs recognised under sales and distribution costs amount to DKK 3,978 thou-
sand (2012: DKK 2,054 thousand) and costs recognised under administrative costs amount to DKK 1,821 thousand (2012: DKK 1,897 |
thousand).
Plan assets can be broken down as follows:
Shares 175,170 160,726
Bonds 243,223 239,276
Cash 1,680 2,819
Total 420,073 402,821
All plan assets are investments held in LGIM funds, which in turn invest directly in highly rated assets that are traded on a stock ex-
change.
Return on plan assets:
Actual return on plan assets |. 26,888 42,846
Calculated interest on plan assets . 17,396 17,680
Actuarial gain (loss) on plan assets ' 9,492 25,166
The average assumptions for the actuarial calculations at the balance sheet date can be stated as follows:
Discount rate (avg.) 4.60% 4.50%
Expected inflation rate ” 3.50% 3.20%
Members' lifetime from retirement age (years) . 22,8 22.2
141041QEQ0GSN0€6325
ANNUAL REPORT 2013] FINANCIAL STATEMENTS 65
Notes — Balance sheet
19 PENSION OBLIGATIONS — CONTINUED
Sensitivity analysis
The table below shows the sensitivity of the pension obligation to changes in the key assumptions for determination of the obli-
gation on the balance sheet date. The H+H Group is also exposed to developments in the market value of the plan assets. The
key actuarial assumptions in determination of the pension obligation relate to interest rate level, pay increases and mortality.
The analysis is based on the reasonably likely changes which can be expected on the balance sheet date, provided that the other param-
eters in the calculations are unchanged and not subject to consequential changes:
Group
(DKK 7000) 2013 2012
Sensitivity relative to discount rate:
If the discount rate falls by 0,1 percentage point, the pension obligation will increase by 9,722 9,607
Sensitivity relative to inflation:
lfthe inflation rate increases by 0.1 percentage point, the pension obligation will increase by 4,174 4,119
Sensitivity relative to life expectancy from retirement age:
lf the life expectancy from retirement age increases by 1 year, '
the pension obligation will increase by 14,182 14,008
The Group expects to pay DKK 19 million into the defined benefit pension plan in 2014 (2013: DKK 21 million).
The pension obligation is expected to fall due as follows:
O-lyear 21,000 21,000
1-5 years 84,000 84,000
Over 5 years | 462,000 455,000
Total 567,000 560,000
Actuarial assumptions
Discount rate
The discount rate is based on high-quality corporate bonds, and an adjustment has been made to reflect the fact that the duration of the
bonds does not correspond to the duration of the pension obligation.
Price inflation
Inflation is based on market expectations for inflation over the duration of the pension liabilities and is calculated as a single equivalent
rate.
Demographic assumptions are based on the latest available mortality projection model.
Accounting policies
Pension obligations: The H+H Group has entered into pension agreements and similar agreements with some of its employees, Obliga-
tions relating to defined contribution plans are recognised in the income statement over the vesting period, and any contributions
payable are recognised in the balance sheet as other payables.
In the case of defined benefit plans, the value in use of future benefits to be paid under the plan is determined actuarlally on an annual
basis. The value in use is determined on the basis of assumptions concerning future trends in factors such as salary levels, interest
rates, inflation and mortality.
1410410E0GSN06326
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 66
Notes — Balance sheet
19 PENSION OBLIGATIONS — CONTINUED
The value in use is determined only for the benefits attributable to service already rendered to the H+H Group. The actuarially deter-
mined value in use less the fair value of any plan assets is recognised in the balance sheet under pension obligations.
The pension cost for the year is recognised in the income statement based on actuarial estimates and the financial outlook at the start
of the year. Differences between the expected development in plan assets and obligations and the realised values determined at year-
end are designated as actuarial gains or losses and recognised in other comprehensive income.
Critical accounting estimates and judgements
Defined benefit pension plans: The present value of pension obligations depends on the actuarial assumptions made. These assump-
tions comprise the discount rate, inflation rate, estimated return on plan assets, future salary increases, mortality and future develop-
ments in pension obligations,
All assumptions are reviewed at the reporting date. Any changes in the assumptions will affect the carrying amount of the pension
obligations.
1410410E0GSW0€6327
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 67
Notes — Balance sheet
20 PROVISIONS
Group
(DKK 000) 2013 2012
Provisions at 1 January 6,940 7,725
Foreign exchange adjustments . (129) 229
Provisions for the year 10,334 1,589
Utilised during the year (1,487) 1
Reversals during the year (6,014) (2,416)
Transferred from liabilities relating to assets held for sale 188 o
Transferred to liabilities relating to assets held for sale (5,832) (188)
Provisions at 31 December 4,000 6,940
Breakdown of the provisions at 31 December:
Warranty obligations 1,486 1,810
Obligations relating to restoration of sites 933 4,290
Other provisions 1,581 840
Total 4.000 6,940
H+H's companies provide normal warranties in respect of products supplied to customers. The provision for warranty obligations thus
relates to warranties provided in respect of products supplied prior to the balance sheet date. The warranty period varies depending
on normal practice in the markets in question. The warranty period is typically between one and five years. Warranty obligations have
been determined separately for each company based on normal practice in the market in question and historical warranty costs. At 31
December 2013 warranty obligations relate predominantly to Germany.
A bank guarantee has been pledged on behalf of a business partner.
The obligation in respect of restoration of sites relates to H+H's sites in Poland and the UK, The obligation has been calculated on the
basis of external assessments of the restoration costs. Restoration is expected to take place after five years.
Accounting policies
Provisions are recognised when, as a result of an event occurring before or at the balance sheet date, the H+H Group has a legal or
constructive obligation, the settlement of which is expected to result in an outflow from the company of resources embodying economic
benefits.
The measurement of provisions is based on management's best estimate of the amount expected to be required to settle the obligation.
In connection with the measurement of provisions, the costs required to settle the obligation are discounted to net present value if tnis
has a material effect on the measurement of the obligation. A pre-tax discount rate is applied that reflects society's general interest
rate level plus the specific risks attached to the provision. The changes in present values during the financial year are recognised under
financial expenses.
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty
data.
A provision for restructuring is recognised when a detailed formal plan for the restructuring has been made public, no later than the bal-
ance sheet date, to those affected by the plan.
A provision for onerous contracis is recognised when the benefits expected to be derived by the H+H Group from a contract are lower
than the unavoidable costs of meeting its obligations under the contract.
Ifthe H+H Group has an obligation to dismantle or remove an asset or restore the site on which thé asset has been used, a provision
equivalent to the present value of the expected future expenses is recognised.
1410410QE0GSN06328
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 68
Notes — Balance sheet
21 CREDIT INSTITUTIONS
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Bank loans ” 590,355 557,482 295,016 256,046
Amortised borrowing costs (613) (2,079) (613) (2,079)
Total ” 589,742 555,403 294,403 253,967
Payables to credit institutions are recognised
in the balance sheet as follows:
Non-current 571.678 554112 - 294,403 253,967
Liabilities relating to assets held for sale 18,064 1,291 0 0
Total . 589,742 555,403 294,403 253,967
H+H will be dependent on debt financing in the coming years, and maintenance of the committed credit facilities is conditional upon
compliance with a number of financial covenants.
Accounting policies
Bank loans etc. are recognised at the date of borrowing at the proceeds received net of transaction costs incurred. In subsequent
periods, the financial liabilities are measured at amortised cost using the effective interest rate method. Accordingly, the difference
between the proceeds and the nominal value is recognised in the income statement under financial expenses over the term of the loan.
Financial liabilities also include the capitalised residual obligation on finance leases, measured at amortised cost. Other liabilities are
measured at amortised cost.
22 CONTINGENT LIABILITIES
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Lease Lease Lease Lease
Operating leases .… Payments payments . payments payments
0-1 year ' 9,507 4,917 342 370
1-5 years 17,475 10,625 238 231
Over 5 years | 1,242 728 0 0
Total ; 28,224 16,270 580 601
Lease payments under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. As-
sets held under operating leases comprise production equipment and vehicles, primarily in the UK and Germany.
Group Parent company
2013 2012 2013 2012
Rental Rental Rental Rental
Rental obligations payments payments . payments payments
O-lyear i 3,084 3,147 606 606
1-5 years . 5,108 6,531 758 1,364
Over 5 years — 56,967 59,337 0 0
Total ” 65,159 69,015 1,364 1,970
The H+H Group's key rental obligations consist of long-term land leases in Poland and the UK.
An amount of DKK 7,928 thousand (2012: DKK 6,086 thousand) has been recognised in the consolidated income statement for 2013 in
respect of operating leases and rental obligations.
1410410EQ0GSN06329
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 69
Notes — Supplementary information
22 CONTINGENT LIABILITIES — CONTINUED
Taxes and duties
The parent company is the administration company for the jointiy taxed Danish companies, Pursuant to the rules on this contained in
the Danish Corporation Tax Act, the parent company is thus liable to withhold tax at source on interest, royalties and dividends for the
Jointly taxed companies for contingent liabilities, and to withhold corporation tax from 1 January 2013. The Group's Danish companies
are further jointly and severally liable for joint registration of VAT.
Financial guarantee
The parent company H+H International A/S acts as guarantor for the subsidiaries' drawdowns on the Group's credit facility. The finan-
cial guarantee at 31 December 2013 amounts to DKK 295,474 thousand (2012: DKK 294,356 thousand).
Other
The parent company H+H International A/S has issued letters of support to some of the subsidiaries. Management does not expect
these to give rise to losses for the parent company.
The H+H Group is a party to a few pending legal proceedings. In management's opinion, the outcome of these proceedings will not have
any impact on the Group's financial position apart from the receivables and payables recognised in the balance sheet.
Shares in subsidiaries have been pledged as security for a loan agreement with Danske Bank A/S.
23 AUDITORS' REMUNERATION
Group Parent company
(DKK 7000) 2013 2012 2013 2012
Total fees for the parent company's auditors elected at
the annual general meeting: 7
Deloitte . 2,080 2,224 510 435
KPMG 0 585 0 405
Total 2,080 2,809 510 838
The total fee can be brøken down as follows: |
Statutory audit "— 1,786 1,735 510 435
Tax and VAT assistance 188 327 0 11
Other services 106 747 0 394
Total . 2,080 2,809 510 838
24. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
Ås part of its continued focus on core business and a desire to reduce interest-bearing debt, H+H aims to sell sorne of its non-strategic
assets in the coming year.
Various plots of land in Poland, a plot of land in the UK and unused production equipment have therefore been readied for sale and
classified as assets held for sale. If all of these assets are sold at their expected value, the sale proceeds will be around DKK 60 million
and resultin an expected accounting gain before tax of around DKK 20 million. The transactions are expected to be completed within 12
months and are not included in the outlook for 2014.
As part of H+H's continued focus on core business, the Board of Directors decided in the third quarter of 2011 to divest the Finnish
subsidiary Jåmerå-kivitalot Oy, which designs, builds and sells aircrete houses for private individuals. The divestment was carried out in
2012 through the disposal of the bulk of the subsidiary's activities, All that is left in the subsidiary, subsequently renamed Stone Kivitalot
Oy, is a few projects due to be completed in 2014, Stone Kivitalot Oy has therefore been classified as a discontinued operation,
Following the conclusion of negotiations with the unions, it was decided to close H+H Finland Oy's factory in Ikaalinen in order to boost
overall competitiveness and optimise the capacity utilisation of H+H's other factories.
The closure took place in April 2013 and is not expected to affect sales volumes in H+H's European markets, but exports to Africa will be
substantially reduced. The closure entailed 66 redundancies at H+H Finland Oy. The Finnish operation has therefore been classified as a
discontinued operation.
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ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 70
Notes — Supplementary information
24. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE — CONTINUED
Group
(DKK 7000) 2013 2012
Discontinued operations have impacted the income statement as follows:
Operating loss for the period until transfer of control (52,364) (50,835)
Tax on loss for the period 0 (1,020)
Gain on sale of non-current assets held for sale o 6,344
Impact on profit for the year, net (52,364) (45,511)
Operating loss for the period until transfer of control can be specified as follows:
Revenue 43,178 202,200
Expenses (95,542) (253,035)
Loss for the year before tax (52,364) (50,835)
Tax on loss for the year o (1,020)
Loss for the year after tax (52,364) (51,855)
Loss for the year from discontinued operations (52,364) (51,855)
Earnings per share from discontinued operations (EPS) (DKK) (5.35) (4,65)
Diluted earnings per share from discontinued operations (EPS-D) (DKK) (5.35) (4.65)
Cash flow from operating activities (45,555) (51,553)
Cash flow from investing activities 9 (551)
Cash flow from financing activities 16,769 (3,476)
Total cash flow (28,777) (55,580)
The sale of the discontinued operation can be specified as follows:
Carrying amount of net assets 0 1,116
Gain on sale o 6,344
Selling price o 7,460
Assets for sale and liabilities relating to assets held for sale:
Intangible assets 3,962 15,215
Property, plant and equipment 42,988 46,416
Inventories i 10,550 (98;
Receivables . 6,900 26,036
Cash and cash equivalents 76 0
Assets held for sale, total ” 64,476 87,667
Credit institutions £ ' 18,064 1,291
Trade payables 1,143 3,193
Other payables 8,694 5,583
Other provisions ' 21,798 42,145
Liabilities relating to assets held for sale, total . 49,699 52,212
1410410E0GSWN06331
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 71
Notes — Supplementary information
24 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE — CONTINUED
Accounting policies
Assets held for sale: Assets held for sale comprise non-current assets and disposal groups which are intended for sale. A disposal group
is a group of assets which will be disposed of together by means of sale or similar in a single transaction. Liabilities relating to assets
”held for sale” are liabilities directly associated with these assets, which will be transferred at the time of the transaction. Assets are
classified as "held for sale” if their carrying amount will primarily be recovered by means of sale within 12 months in accordance with a
formal plan rather than by means of continued use.
Assets or disposal groups held for sale are measured at the lower of the carrying amount at the time of classification as "held for sale"
and the fair value less selling costs. No depreciation or amortisation is applied to assets from the time they are classified as "held for
sale”.
Impairment losses arising in connection with initial classification as "held for sale" and gains or losses on subsequent measurement
at the lower of carrying amount and fair value less selling costs are recognised in the income statement under the items to which they
relate. Gains and losses are disclosed in the notes.
Assets and associated liabilities are recorded separately in the balance sheet, and the main items are specified in the notes. The
comparative figures in the balance sheet are not restated.
Presentation of discontinued operations. Discontinued operations make up a significant part of the business, the activities and cash
flows of which can be clearly separated from the rest of the business in operational and accounting terms, and where the entity has
either been disposed of or has been classified as "held for sale" and the sale is expected to be implemented within one year in accord-
ance with a formal plan. Discontinued operations also include entities classified as ”held for sale" in connection with the acquisition.
Profit after tax from discontinued operations, value adjustments after tax on associated assets and liabilities, and gains/losses on sale
are presented in a separate line in the income statement, and the comparative figures are restated. Revenue, expenses, value adjust-
ments and tax on the discontinued operation are disclosed in the notes, Assets and associated liabilities for discontinued operations
are recorded separately in the balance sheet without the comparative figures being restated, cf. ”Assets held for sale”, and the main
items are specified in the notes.
Cash flows from operating, investing and financing activities for the discontinued operations are disclosed in a note.
LN Critical accounting estimates and judgements
Assets held for sale and discontinued operations: Estimates significant to the financial reporting for discontinued operations mainly
comprise measurement of the selling price of projects in progress, which is determined i.a. on the basis of expected residual expenses
and income. Also relevant here is the outcome of disputes relating to claims for additional performance, payment for delays etc., deter-
mined i.a. on the basis of the stage of negotiation with the counterparty and an assessment of the likely outcome.
25 ACQUISITION AND DIVESTMENT OF SUBSIDIARIES AND ACTIVITIES
No subsidiaries or activities have been acquired or disposed of in 2013.
In 2012 H+H International A/S disposed of the subsidiary H+H Ceskå republika s.r.0. and the majority of the activities in Jåmerå-kivitalot
Oy. The cash selling price was DKK 121,144 thousand. The disposals resulted in a total gain on sales of DKK 12,077 thousand. Total
expenses in connection with the disposals amounted to DKK 10,660 thousand.
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS
H+H's risk management policy
Ås a result of its operating, investing and financing activities, H+rH is exposed to various financial risks, including market risks (currency,
interest rate and commodity risks), credit risks and liquidity risks. It is H+H's policy not to speculate actively in financial risks.
H+H's financial risk management is thus aimed exclusively at managing the financial risks that are a direct consequence of H+H's
operating, investing and financing activities. This note relates exclusively to financial risks directly associated with H+H's financial
instruments. There have been no material changes in H+H's risk exposure or risk management compared with last year.
Currency risks
H+H's companies are exposed to currency risks. Financial instruments are primarily entered into in the individual consolidated entities'
functional currencies as a result of their purchase and sales transactions, However, H+H has a translation risk, and as a result of this
H+H's profit/loss is exposed to fluctuations in the functional currencies. H+H does not engage in currency speculation.
1410410E0GSW06332
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 72
Notes — Supplementary information
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS - CONTINUED
The individual consolidated entities do not enter into financial instruments denominated in foreign currencies unless commercially war-
ranted, and expected transactions and financial instruments in foreign currencies that exceed a limited level and time horizon require
hedging. Derivatives and other financial instruments are used only to a limited extent to hedge currency risks. H+H did not use deriv-
atives or other financial instruments to hedge currency risks in 2013 and 2012.
The individual subsidiaries do not have any material exposure to currencies other than the functional currency. The table on the following page
shows the Group's monetary items by currency.
Interest rate risks
As aresult of its investing and financing activities, H+H is exposed to interest rate fluctuations both in Denmark and abroad. The main
interest rate exposure is related to fluctuations in CIBOR, LIBOR, EURIBOR and WIBOR. Itis H+H's policy to hedge interest rate risks on
H+H's loans if itis assessed that the interest payments can be hedged at a satisfactory level. Hedging is normally effected using interest
rate swaps, where floating-rate loans are swapped to fixed-rate loans.
Liquidity risks
The H+H Group's liquidity risk is defined as the risk that tne H+H Group will not, in a worst-case scenario, be able to meet its financial
obligations due to insufficient liquidity. It is the H+H Group's policy for capital procurement and placing of surplus funds to be managed
centrally by the parent company.
H+H regularly evaluates the capital structure on the basis of expected cash flows with a view to ensuring an appropriate balance bet-
ween adequate future financial flexibility and a reasonable return to shareholders.
Loan agreement
The Group has a loan agreement with Danske Bank A/S, which is a committed credit facility running until 15 February 2015. More
favourable covenants were obtained in connection with reducing the committed credit facility in 2012. The loan agreement's covenants
will be calculated quarterly until the agreement expires.
There is no obligation to make ordinary repayments prior to the expiry of the loan agreement on 15 February 2015. The company and
those of its subsidiaries that are participating in the loan agreements, or that may be considered a material subsidiary, provide cross-
guarantees for each other's obligations under the loan agreement.
The loan agreement may be cancelled without notice by the lender if the company's shares are delisted from NASDAQ OMX Copenha-
gen. The loan agreement may also be terminated by Danske Bank A/S without notice if investors other than Scandinavian institutional
investors, individually or through coordinated collaboration, gain control of more than one-third of the shares or more than one-third of
the total number of voting rights carried by the shares in H+H International A/S.
The loan agreement prevents the Board of Directors, without the prior permission of the lender, from recommending annual dividend
distributions to shareholders of an amount that exceeds 50% of the company's profit after tax in the preceding financial year.
The company is also subject to restrictions on its right of disposal over its assets without the prior permission of the lender, including:
= The sale of key assets
m Significant acquisitions, mergers, restructuring or similar transactions
m Entering into significant leases
The loan agreement contains a number of financial conditions ("covenants”):
Total net interest-bearing debt to ESITDA
Equity to total assets
Debt service cover
EBITDA interest cover
Maximum capital expenditure
The H+H Group has fulfilled all covenants in 2013 and the budget for 2014 supports fulfilment of the covenants in each quarter of 2014.
Credit risks
Hr+H is exposed to credit risks in the course of its activities. These risks are primarily related to receivables in respect of sales of H+H's
products. Other credit risks, which relate to bank deposits and counterparties under financial contracts, are considered to be insignifi-
cant.
The maximum credit risk related to financial assets corresponds to the carrying amounts recognised in the balance sheet. The H+H
Group does not have any material risks relating to a single customer, business partner or country.
1410410E0GSN06333
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 73
Notes — Supplementary information
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS — CONTINUED
The H+H Group's customers are primarily large well-consolidated builders' merchants. The H+H Group has modest credit exposure to
housebuilders and developers in a few markets. In keeping with the H+H Group's credit policy, all major customers are credit rated on a
regular basis. Credit limits are determined on the basis of the individual customer's credit rating.
lfthe credit rating of a customer is considered not to be sufficient, the payment terms will be changed or security or credit insurance will
be obtained. The H+H Group regutlarly monitors its credit exposure to customers as part of its risk management. The customer types
in the individual segments are typically very similar, regardless of which segment they come from. The H+H Group has historically suf-
fered relatively small losses as a result of non-payment on the part of customers. These losses have been evenly distributed among the
H+H Group's geographical segments. The credit quality of receivables is consequently considered to be identical, regardless of which
segment the receivables come from.
Monetary items in foreign currency
Group
(DKK 7000) 2013
. EUR GBP PLN DKK RUB Other Total
Trade receivables . 3,110 7,716 5,922 6,862 — 9,472 6,311 39,393
Cashand cash eauivalenis 12,963 18,557 18532 136 6,014 562 — 40,084
Trade payables (21,229) (62,775) (20,677) (7,104) (2,484) (5,238) ' (119,507)
Credit institutions 0 (249,746) (17,304) (300,650) o (3,978) (571,678)
Gross exposure (5,156) (286,248) (30,207) (300,756) 13,002 (2,343) (611,708) |.
Hedged via derivative
financial instruments 0 0 0 0 0 0 0
Net exposure (5,156) (286,248) (30,207) (300,756) 13,002 (2,343) (611,708)
2012
EUR GBP PLN DKK RUB Other Total
Trade receivables 4,370 O 2,317 6,844 2,872 6,292 22,695
Cash and cash equivalents 9,512 44 4,969 164 341 445 15,475
Trade payables (31,821) (42,108) (20,671) (6,016) (1,951) (4,530) (107,097)
Credit institutions 0 (288,309) 0 (261,686) .… (4,117) (554,112)
Gross exposure (17,939) (330,373) (13,385) (260,694) 1,262 (1,910) (623,039)
Hedged via derivative
financial instruments 0 0 0 0 0 0 0o
Net exposure (17,939) (330,373) (13,385) (260,694) 1,262 (1,910) (623,039)
Parent company's monetary items and sensitivity
(DKK 7000) 2013 2012
Position Sensitivity Position Sensitivity
Hypothetical Hypothetical
Potential impact on Potential impact on
volatility of profit before Hypothetical volatility of profit before - Hypothetical
.… Cashand exchange tax for the impact Cash and exchange tax for the impact
; receivables rate year” on equity receivables rate year” on equity
EUR/DKK ' 316,728 1% 3,167 2,375 347,903 1% 3,479 2,609
GBP/DKK ” (57,075) 5% (2,854) (2,140) (60,446) 5% (3,022) (2,267)
PLN/DKK ' 57,929 5% 2,896 2,172 51,531 5% 2,577 1,932
; 3,209 2,407 3,034 2,274
= The hypothetical impact on profit/loss and equity is significant to the parent company's financial statements but not necessarily to the consolidated
financial statements.
The parent company has significant monetary iterns in currencies other than the functional currency in the form of loans to subsidiaries. The
table above shows the parent company's key monetary positions broken down by currency and derived sensitivity.
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ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 74
Notes — Supplementary information
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS — CONTINUED
Sensitivity of profit and equity to market fluctuations
. Group
(DKK 7000) 2013 2012
Profit Equity Profit Equity
5% increase in GBP/DKK 799 5,374 216 4,918
5% increase in PLN/DKK (1,577) 9,271 (3,200) 11,074
5% increase in RUB/DKK 873 725 3,843 1,191
95 15,370 859 17,183
The table above shows the sensitivity of profit/loss and equity to market fluctuations. A decline in the GBP/DKK, RUB/.DKK and PLN/
DKK exchange rates would result in a corresponding increase in profit/loss after tax and equity. The sensitivity analysis has been calcu-
lated at the balance sheet date or'the basis of the exposure to the stated currencies at the balance sheet date. The calculations are based
sølely on the stated change in the exchange rate and do not take into account any knock-on effects on interest rates, other exchange rates
etc.
Interest rate exposure
Group
(DKK '"000) 2013 2012
Weighted Weighted
time to time to
Net interest- Interest maturity Net interest- Interest maturity
bearing debt hedged Net position of hedging bearing debt hedged Netposition of hedging
DKK. 300,514 0 300,514 0 261,523 O 261,523 0
EUR (12,964) 0 (12,964) 0 (9,512) Q (9,512) 0
PLN 15,452 0 15,452 0 (4,969) 0 (4,969) 0
CZK |. (137) o (137) 0 (126) 0 (126) 0
RUB (6,014) o (6,014) 0 (341) 0 (341) 0
GBP 231,189 o 231,189 0 288,265 0 288,265 O
Other 3,555 Q 3,555 0 3,797 0 3,797 o
Total . 531,595 a 531,595 o 538,637 o 538,637 o
The table above illustrates H+H's interest rate exposure on financial instruments at the balance sheet date, At31 December 2013 the
Group was not involved in any interest rate swaps.
All other things being equal, based on H+H's average net interest-bearing debt (expressed by quarter), an increase of 1 percentage point
per year in the interest rate level relative to the average interest rate level in 2013 would reduce profit/loss before tax by DKK 5.3 million
(2012: DKK 5.4 million).
The interest rate is variable. The interest level changes in accordance with to the performance of the covenants contained in the loan
agreement.
H+H's financial liabilities fall due as follows:
Group
(DKK 7000) 2013
; Carrying
Non-derivative financial instruments: ; . amount Q-iyear 1-5 years Over 5 years
Credit institutions and banks : 571,678 o 571,678 0
Trade payables ” 119,507 119,507 0o 0
Total : 691,185 119,507 571,678 o
2012
Carrying
Non-derivative financial instruments: amount 0-1 year 1-5 years Over 5 years
Credit institutions and banks . 554,112 0O 554,112 0
Trade payables 107,097 107,097 o 0
Total 661,209 107,097 554,112 oa
1410410E0GSN06335
ANNUAL REPORT 2013 | FINANCIAL STATEMENTS 75
Notes — Supplementary information
26 FINANCIAL INSTRUMENTS AND FINANCIAL RISKS — CONTINUED
Hedge accounting under IAS 39
The fair value of those financial instruments that qualify for designation as hedge accounting under IAS 39 is recognised directly in
equity until the hedged items are recognised in the income statement. No such financial instruments were used in 2013 or 2012.
Other derivatives which do not qualify for hedge accounting under IAS 39
The fair value of those financial instruments that do not qualify for hedge accounting under IAS 39 is recognised directly in the income
statement. No such contracts have been recognised at 31 December 2013.
Group
(DKK 000) 2013 2012
Gain/loss Gain/loss
recognised recognised
intheincome — Fair valueat Timeto intheincome Fair value at Time to
statement 31December maturity statement 31 December maturity
Forward exchange contract EUR/SEK
EUR 650 thousand |. 0 0 - (81) 0 …
Categories of financial instruments
Group
(DKK 7000) 2013 2012
Carrying Carrying
amount Fair value amount Fair value
Trade receivables 39,393 39,393 22,695 22,695
Other receivables 19,859 19,859 23,203 23,203
Cash and cash equivalents 40,084 40,084 15,475 15,475
Total receivables 99,336 99,336 61,373 61,373
Credit institutions and banks 571,678 572,291 554,112 557,482
Trade payables and other payables 198,613 198,613 172,097 172,097
Total financial liabilities measured at amortised cost 770,291 770,904 726,209 729,579
Classification and assumptions for the calculation of fair value
Current bank loans at variable interest rates are valued at a rate of 100. The fair value of long-term loans and finance leases is calculated
using models that discount all estimated and fixed cash flows to net present value. The expected cash flows for the individual loan or
lease are based on contractual cash flows. Financial instruments relating to sale and purchase of goods etc. with a short credit period
are considered to have a fair value equal to the carrying amount. The methods are unchanged from 2012.
141041QEO0GSN06336
-ANNUALREPORT 2013 | FINANCIAL STATEMENTS 76
Notes — Supplementary information
27 RELATED PARTIES
The Group's related parties are the Executive Board, the Board of Directors and senior executives in the H+H Group.
Apart from contracts of employment, no agreements or transactions have been entered into between the company and the Executive
Board. Remuneration to the Board of Directors, the Executive Board and senior executives is disclosed in note 3.
H+H International A/S has no controlling shareholders. Besides the parties specified above, the parent company's related parties con-
sist of its subsidiaries, cf. note 15.
ÅA management fee totalling DKK 18,862 thousand (2012: DKK 17,000 thousand) was received by the parent company from the remain-
der ofthe Group.
Transactions between the parent company and subsidiaries also include deposits, loans and interest; these are shown in the parent
company balance sheet and notes 8 and 9.
Trading with related parties is at arm's length.
28 EVENTS AFTER THE BALANCE SHEET DATE
A plot of land inthe United Kingdom was disposed of after the end of the financial year ata carrying amount of DKK 9 million. No other
significant events have occurred after the balance sheet date.
1410410QE0GSN06337
77
Statement by the Executive Board and
the Board of Directors
The Executive Board and the Board of Directors have today discussed and approved the annual report of H+H International A/S for the
. financial year 2013. '
The annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish
disclosure requirements for listed companies.
itis our opinion that the consolidated financial statements and the parent company financial statements give a true and fair view ofthe
Group's and the parent company's financial position at 31 December 2013 and ofthe results ofthe Group's and the parent company's
operations and cash flows for the financial year 1 January — 31 December 2013.
In our opinion, the management's review includes a fair review of the development in the parent company's and the Group's operations
and financial conditions, the results for the year and the parent company's financial position, and the position as a whole for the entities
included in the consolidated financial statements, as well as a description of the more significant risks and uncertainty factors that the
parent company and the Group face.
We recommend that the annual report be approved at the annual general meeting.
Copenhagen, 14 March 2014 hj HILL
EXRCUTINE BOARD fl
ic Oeywsegaår n Niels Eldrup Meidahi
CEO CFO
BOARD OF DIRECTORS 12
Kent Arentoft BØbjørn Pot
Chærman ”
Pjerré>- ien
141041QEQGS806338
Independent auditors' reports
To the shareholders of HrH International A/S
Report on the consolidated financial statements and parent company financial statements
We have audited the consolidated financial statements and parent company financial statements of H+H International A/S for the finan-
cial year 1 January — 31 December 2013, which comprise the income statement, statement of comprehensive income, balance sheet,
statement of changes in equity, cash flow statement and notes, including the accounting policies, for the Group as well as for the parent
company, The consolidated financial statements and parent company financial statements are prepared in accordance with Interna-
tional Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
Management's responsibility for the consolidated financial statements and parent company financial statements
Management is responsible for the preparation of consolidated financial statements and parent company financial statementis that give
a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure require-
ments for listed companies and for such internal control as Management determines is necessary to enable the preparation and fair
presentation of consolidated financial statements and parent company financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on the consolidated financial statements and parent company financial statements based on
our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish
audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements and parent company financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements and parent company financial statements. The procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the consolidated financial statements and parent company financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's prep-
aration of consolidated financial statements and parent company financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by Management, as well as the overall presentation of the consolidated financial statements and parent
company financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion. Our audit has not resulted in any qualification.
Opinion
In our opinion, the consolidated financial statements and parent company financial statements give a true and fair view ofthe Group's
and the parent company's financial position at 31 December 2013, and of the results of their operations and cash flows for the financial
year 1 January — 31 December 2013 in accordance with international Financial Reporting Standards as adopted by the EU and Danish
disclosure requirements for listed companies.
Statement on the management's review
Pursuant to the Danish Financial Statements Act, we have read the management's review. We have not performed any further proce-
dures in addition to the audit of the consolidated financial statements and parent company financial statements. On this basis, itis our
opinion that the information provided in the management's review is consistent with the consolidated financial statements and parent
company financial statements.
Fr
Copenhagen, 14 March 2014
Deloitte
Stat get Revisionspartnerselskab | -
str
ofised
Anders O Kirsten Aaskov Mikkelsen
State Aut State Authorised
Public Accøuntan Public Accountant
1410410E0GSN06339
H+H Addresses
H+H International A/S
CVR No. 49619812
Dampfærgevej 3, 3rd Floor
2100 Copenhagen Ø
Denmark
Tel.: "45352702 00
Fax: 74535 2702 01
www.HplusH.com
WESTERN EUROPE
H+H Danmark A/S H+H Benelux B.V.
Bushøjvænget 129 Magnesiumstraat 1A
8270 Højbjerg 6031 RV Nederweert
Denmark Netherlands
Tel.: 45 70 24 00 50
Fax: 745 70 24 00 51
www. HplusH.dk
Hr+H Deutschland GmbH
Industristr. 3
23829 Wittenborn
Germany
Tel.: +49 4554 700-0
Fax: +49 4554 700-223
www.HplusH.de
H+H Finland Oy
Teikankaantie 256
39500 Ikaalinen
Finland
Tel.: "358 207 524 200
” Fax: 7358 207 524 222
www.HplusH.fi
1410Q410E0GSN06340
Tel.: $31495 450169
Fax: 731495 450069
www.HplusH.ni
H+H Sverige AB
Stenyxegatan 35
213 76 Malmé
Sweden
Tel.: "46 40 55 23 00
Fax: 746 40 55 2310
www. HplusH.se
H+H UK Limited
Celcon House, Ightham
Sevenoaks, Kent TN15 $SHZ
UK
Tel.: +44 1732 886333
Fax: +44 1732 886810
www. HplusH.co.uk
EASTERN EUROPE
H+H Polska Sp. Z 0.0.
ul. Kupiecka 6
03-046 Warsaw
Poland
Tel.: +48 22 5184000
Fax: 748 22 5184 029
www.HplusH.pl
000 H+H, Russia
Fuchika str 4, Letter K, Office 602
192102 St Petersburg
Russia
Tel.: =7 812 609-09-00
Fax: 7 812 609-09-01
www.HplusH.ru
H+H International A/S
Dampfærgevej 3, 3rd Floor
2100 Copenhagen Ø
Ida lg 18
+45 35 2702 00 Telephone
+4535270201 Telefax
infogHplusH.com
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