H+H International's European Divide: Growth vs. German Losses

COPENHAGEN, Denmark – February 26, 2026 – Building materials manufacturer H+H International A/S today revealed a complex financial picture for 2025, showcasing improved core profitability even as significant restructuring charges in its German division dragged the company to a substantial net loss. The preliminary, unaudited results highlight a stark divergence in performance across its European markets and set a cautious tone for 2026, with severe winter weather already casting a shadow over the year's earnings forecast.

The Danish-based company reported an increase in earnings before special items (EBIT bsi) to DKK 112 million for 2025, a 78% improvement over the DKK 63 million recorded in 2024. However, this operational gain was completely eclipsed by a staggering net loss of DKK 665 million for the year, a dramatic decline from the DKK 50 million loss in the prior year. This disparity underscores the profound impact of strategic decisions made to address deep-seated issues in one of its largest markets.

A Tale of Two Markets

H+H's 2025 performance paints a clear picture of a company operating in two different realities. While overall revenue remained flat at DKK 2,743 million, the story lies in the regional contributions. According to CEO Jörg Brinkmann, the markets in Poland, the United Kingdom, and Switzerland delivered "very strong performance," acting as the engine for the group's improved operating profit.

In a statement, Brinkmann emphasized the strength of these core regions, noting, "Excluding Germany, our group EBIT bsi margin would have reached 12%, underlining the strong performance outside of Germany." This figure stands in sharp contrast to the group's actual EBIT bsi margin of just 4%. This performance in key markets came despite what the company described as "challenging" conditions for the residential new build sector across Europe, which has been grappling with high interest rates and dampened consumer confidence. The stability in the UK and Poland, in particular, provided a crucial buffer against more severe downturns elsewhere.

The situation in Germany, however, tells a different story. The market continued to be "loss-making" throughout 2025, acting as a significant drag on the company's overall results. This reflects a broader crisis within the German construction industry, which has been hit hard by a collapse in demand for new housing, rising financing costs, and regulatory burdens that have led to widespread project cancellations and postponements. H+H's struggles in the region serve as a bellwether for the difficult operating environment facing building material suppliers in Europe's largest economy.

The German Restructuring and Its Toll

The enormous DKK 665 million net loss is directly linked to the company's decisive action to overhaul its German operations. In mid-2025, H+H initiated a major restructuring program, shifting its business model from a national coverage strategy to a more focused regional approach. This strategic pivot was designed to lower the cost base and improve commercial effectiveness in a persistently weak market.

The financial cost of this overhaul was immense. The company's interim reports from 2025 reveal that the negative result was driven by "special items" totaling hundreds of millions of Danish kroner. These included DKK 612 million in impairments and write-downs recognized in the second quarter, primarily related to property, plant, equipment, and goodwill associated with the German business. An additional DKK 43 million in restructuring costs, mainly for severance payments, were booked in the third quarter.

While painful, H+H management views this restructuring as a necessary step toward future viability. The company has a "clear focus on cash generation" in Germany and expects the program to yield annual benefits of approximately DKK 40 million starting in 2026. This move highlights a strategic retreat to fortify regional strongholds rather than continuing to absorb losses from a broad, underperforming national presence.

A Frosty Outlook for 2026

Looking ahead, H+H has issued a guarded financial outlook for 2026, reflecting both persistent market uncertainty and a difficult start to the year. The company projects revenue growth in local currencies to be in the range of -5% to 0%, with EBIT before special items expected to land between DKK 50 million and DKK 100 million. This forecast represents a potential step back from the DKK 112 million EBIT bsi achieved in 2025.

A primary driver for this caution is the "unusually severe winter weather" that swept across its markets at the start of the year. The company estimates this will have a negative impact of around DKK 70 million on its EBIT bsi, a significant blow from which it expects only "limited recovery of the lost volumes during the remainder of the year." This weather-related disruption has already kneecapped first-quarter earnings and significantly lowered the ceiling for the full-year forecast.

Despite these headwinds, the company is focused on its strategic priorities. Brinkmann stated that H+H will continue "building our businesses in Poland, the UK and Switzerland through operational discipline, margin protection, and the continued rollout of our HOME programme." This strategy aims to ensure the company is positioned to "capture higher demand when the markets improve." For 2026, capital expenditures are planned to be between DKK 100-120 million, and the company anticipates generating positive free cash flow, partly through asset sales, a reversal from the negative DKK 61 million in 2025. Investors and analysts will have an opportunity to delve deeper into the results and outlook when the full 2025 annual report is released on March 3, followed by a conference call on March 4.