HusCompagniet realised H1 2024 performance in line with expectations and narrows full-year guidance

Company Announcement 13/2024

Interim financial report for the period 1 January – 30 June 2024

HusCompagniet realised revenue of DKK 1,062 million in H1 2024, down from DKK 1,280 million in H1 2023 due to fewer deliveries after lower sales in 2023. Gross margin increased to 23.4% from 20.9%, supported by a solid Q1 2024 performance and the comparison period being impacted by re-evaluation of provisions related to prior years. EBITDA came to DKK 45 million for an EBITDA margin of 4.2%. EBIT amounted to DKK 21 million.

In H1 2024, HusCompagniet sold 640 houses (units), an increase of 44% mainly driven by the semi-detached segment and supported by the detached business. The net order backlog increased by 25% compared to H1 2023.   

Group CEO of HusCompagniet, Martin Ravn-Nielsen says: “Our financial performance in the first half of 2024 was in line with expectations on the back of more project wins and a strengthening of our position in the B2B segment combined with moderately improving market conditions in the detached segment and continued strict cost control.”

“We increased sales by 44% in the first half of the year after generating solid progress in the semi-detached segment and slight improvements in the detached business showing signs of gradual market recovery. We are narrowing our full-year guidance on the back of a satisfactory activity level, and for the longer term we are pleased to note increasing awareness and focus on HusCompagniet as an attractive partner for professional investors”, says Martin Ravn-Nielsen.

Selected key highlights Q2 and H1 2024

Highlights

• In H1 2024, sales came to 640 houses (units) against 445 in H1 2023 with progress driven by the semi-detached business with 228 units sold compared to 101 in H1 2023. This excludes the Velkomn project of 153 units announced in July 2024 and the NREP project of 164 semi-detached houses announced in November 2023, still awaiting building permit. Sales in the detached segment increased to 373 units from 287, while sales decreased to 39 units from 57 in the Swedish Wooden houses segment. 
• Revenue totalled DKK 1,062 million in H1 2024, down 17% driven by fewer deliveries across segments due to lower sales in 2023. Deliveries came to 382 houses (units) in H1 2024 from 609 in the comparison period.
• Gross margin rose to 23.4% in H1 2024 from 20.9% in H1 2023 driven by strong cost control and the comparison period being negatively impacted by a DKK 15 million re-evaluation of provisions related to prior years.
• H1 2024 EBITDA amounted to DKK 45 million for a margin of 4.2% against DKK 57 million and a margin of 4.4% in H1 2023.
• EBIT came to DKK 21 million in H1 2024, down from DKK 35 million last year.
• The order backlog (net) increased by 25% to DKK 1,472 million at end of Q2 2024, driven by improved sales.
• End of Q2 2024, net debt amounted to DKK 236 million for a leverage ratio (NIBD/LTM EBITDA) of 2.4x, down from net debt of DKK 489 million and a leverage ratio of 2.5x at end of Q2 2023 driven by lower working capital.

Outlook for 2024

Based on the H1 2024 financial performance and expectations for the remainder of 2024, the guidance issued on 8 March 2024 is narrowed:

• Revenue is expected to be DKK 2.3-2.4 billion (previously DKK 2,300-2,600 million)
• EBITDA is expected to be DKK 90-120 million (previously DKK 80-130 million)
• Operating profit (EBIT) is expected to be DKK 40-70 million (previously DKK 30-80 million)

Assumptions for the outlook

• Current expectations for 2024 deliveries are between 850 and 950 houses.
• The 2024 guidance is based on no severe disruption of supply chains emerging and on raw material prices not significantly exceeding current levels.
• Dividend distribution to shareholders remains suspended and is not expected to be reintroduced before leverage is below the long-term target of 2x net debt to EBITDA.

Webcast and conference call

HusCompagniet will host a conference call for investors and analysts at 10:00 (CEST) today, Friday 23 August 2024. The conference call and presentation will be available from HusCompagniet’s investor website.

Conference call dial-in numbers for investors and analysts:

Participant Dial-in:

Denmark: +45-7-8768490

France: +33-1-81221259

Germany: +49-30-21789327

Sweden: +46-8-1241-0952

United Kingdom: +44-203-7696819

United States: +1 646-787-0157

PIN: 649396

Webcast link:

https://huscompagniet-events.eventcdn.net/events/h1-2024

For additional information, please contact:

Allan Auning-Hansen Group CFO                                                                                   +45 30 10 25 00

Business Update

In the first half of 2024, overall sales increased despite continued cautiousness impacting consumer willingness to make large investment decisions. The positive trend in sales was supported by slightly decreasing interest rates towards the end of the reporting period, continuous relative improvements in consumer confidence from a very low level, and an unchanged strong job market. Core inflation stabilised at a significantly lower level compared to the first half of 2023.

HusCompagniet sold 640 units in the first six months of 2024 against 445 in the same period last year, and delivered 382 units, down from 609 in first half 2023.

The detached market in Denmark showed signs of gradual recovery at a moderate pace, supporting an increase in customer leads and meeting activity. On this background, the core detached segment increased sales in the quarter and the half year.

In the semi-detached segment, HusCompagniet entered contracts on smaller projects contributing to an order backlog with projects of varying sizes. After the balance sheet date, a partnership with property developer and operator of rental housing Velkomn was entered on a project of 153 DGNB gold-certified semi-detached houses in Haslev, Southern Zealand. Overall, the activity level remained satisfactory and constructive dialogues with larger investors continued.

Sweden was one of the first countries in Europe to implement an interest rate cut in Spring 2024, but overall, the economy and housing market saw fewer signs of a potential near-term pickup from a low level. To optimise capacity utilisation on the Swedish factory, it was prepared for potential delivery to the semi-detached segment in Denmark.

In H1 2024, revenue came to DKK 1,062 million where the core market, Danish detached houses, comprised 77%, while semi-detached and the Swedish Wooden houses segment comprised 18% and 5%, respectively.

Customer satisfaction

HusCompagniet maintained its position as the best rated housing construction company among Danish customers on Trustpilot with a satisfaction score of 4.9 out of 5.0 based on a total of more than 6,000 reviews.

Financial review

Revenue

Q2 2024 revenue came to DKK 579 million, down from DKK 624 million in Q2 2023, as a higher number of deliveries in the detached segment was offset by a decline in the semi-detached and Wooden houses segments as a consequence of lower sales towards end-2023. Deliveries totalled 215 units, down from 265 in the comparison period.

H1 2024 revenue amounted to DKK 1,062 million compared to DKK 1,280 million in the same period last year. 382 housing units were delivered in the period, against 609 last year.

Gross margin

Q2 2024 gross margin was 22.1% against 18.9% in Q2 2023, where the detached segment was negatively affected by a DKK 15 million re-evaluation of provisions related to prior years.

H1 2024 gross margin came to 23.4%, supported by a solid 25.0% margin in Q1 2024, and up from 20.9% in H1 2023.

EBITDA

EBITDA increased to DKK 24 million for a margin of 4.1% in Q2 2024 against DKK 17 million and a margin of 2.7% in Q2 2023, which included the re-evaluation of provisions.

H1 2024 EBITDA amounted to DKK 45 million against DKK 57 million in H1 2023.

Amortisation and depreciation

In Q2 2024, amortisation and depreciation came to DKK 12 million, up from DKK 11 million in Q2 2023.

In H1 2024, the amount was DKK 24 million against DKK 22 million in the comparison period.

Amortisation mainly consists of development projects, whereas depreciation primarily refers to leasing contracts, factory equipment and IT projects.

EBIT

EBIT came to DKK 12 million in Q2 2024, up from DKK 6 million in Q2 2023, which was impacted by special items of DKK 1 million.  For H1 2024, EBIT amounted to DKK 21 million against DKK 35 million in H1 2023.

Net financials

In Q2 2024, net financials were an expense of DKK 10 million, down from an expense of DKK 13 million in Q2 2023. For H1 2024, net financials came to an expense of DKK 20 million, down from an expense of DKK 22 million in H1 2023, which was impacted by refinancing costs from full amortisation of cost related to previous loan and higher interest.

Taxation

In Q2 2024, tax amounted to negative DKK 3 million compared to DKK 2 million in Q2 2024. For H1 2024 tax amounted to DKK 2 million, on par with H1 2023.

Discontinued operations

In 2020, HusCompagniet closed its brick house activities in Germany and Sweden. H1 2024 profit from discontinued operations came to DKK 8 million compared to a loss of DKK 3 million in the comparison period. The change mainly reflected an adjustment of close-down provision and a correction of tax for previous years.

Group profit for the period

Q2 2024 profit amounted to DKK 8 million, up from negative DKK 8 million in Q2 2023. In H1 2024, profit came to DKK 7 million, on par with H1 2023.

*Only Denmark

Cash flow

Operating activities

In Q2 2024, cash flow from operating activities came to DKK 135 million, up from DKK 65 million in Q2 2023. The development was primarily driven by increased deliveries in the detached segment and a relative increase in on-account invoicing of B2B projects as well as timing of creditor payments between quarters.

In H1 2024, cash generated from operating activities amounted to DKK 134 million, up from DKK 97 million in the comparison period. 

Investing activities

In Q2 2024, cash outflow from investing activities amounted to DKK 3 million, against an outflow of DKK 4 million in Q2 2023.

In H1 2024, cash outflow came to DKK 4 million compared to an outflow of DKK 11 million in H1 2023, which was impacted by higher investments in property, plant and equipment as well as digitalisation projects.

Financing activities

Cash outflow from financing activities in Q2 2024 was DKK 11 million against an inflow of DKK 18 million in Q2 2023, which mainly related to a capital raise of DKK 207 million and repayment of loans (DKK 175 million).

H1 2024 cash outflow came to DKK 17 million compared to an inflow of DKK 2 million in H1 2024.

Free cash flow

Q2 2024 free cash flow increased to DKK 133 million, up from DKK 61 million in Q2 2023, mainly driven by operating activities.

In H1 2024 free cash flow came to DKK 130 million against DKK 87 million in H1 2023.

Balance sheet

Financing

At end of H1 2024, net interest-bearing debt (NIBD) amounted to DKK 236 million, down from DKK 489 million at end-H1 2023, supported by lower working capital. The financial leverage was 2.4x LTM EBITDA compared to 3.3x at year-end 2023.

Equity

Equity amounted to DKK 2,093 million in H1 2024, up from DKK 2,064 million in H1 2023 due to higher retained earnings and other reserves.

Net working capital

At end-H1 2024, net working capital amounted to DKK 216 million, down from DKK 461 million in the comparison period. The development was driven by the improved cash flow from operating activities.

Contract assets

At end-H1 2024, Net contract assets were DKK 264 million, down from 425 end-H1 2023 due to lower sales level in H1 2023.

Dividend

Dividends were suspended in 2023 as part of the debt refinancing agreement entered into in Q2 2023. HusCompagniet expects to return to making dividend payments, once the leverage is below 2x net debt to EBITDA.

Segments

In H1 2024, the detached segment comprised 77% of total revenue, whereas semi-detached and Wooden houses generated 18% and 5%, respectively. H1 2023 revenue split was 67%, 19% and 14%, respectively.

Detached houses

Q2 2024 revenue amounted to DKK 461 million, up from DKK 412 million and Average selling price (ASP) was DKK 2.8 million, down from DKK 2.9 million. Deliveries totalled 160 against 142 last year, and share of own land deliveries was 7.5%, down from 9.2%. Sales came to 201 housing units, up from 169 in Q2 2023.

H1 2024 revenue decreased to DKK 817 million from DKK 859 million in H1 2023 with ASP coming to DKK 2.8 million, down from DKK 2.9 million in H1 2023, due to changes in market geography and product mix. Deliveries totalled 272, down from 342 in 2023, and share of own land deliveries was 6.3%, down from 8.5% in 2023. The number of housing units sold was 373, up from 287 in H1 2023.

In Q2 2024, gross margin was 19.9%, up from 15.0% in 2023, and EBITDA was DKK 20 million against negative DKK 5 million in the comparison period, which was impacted by the beforementioned provision of DKK 15 million. In H1 2024, gross margin was 20.0%, up from 16.8% in H1 2023, and EBITDA came to DKK 23 million against DKK 12 million in H1 2023.

In Q2 2024, EBIT amounted to DKK 11 million compared to negative DKK 13 million in the comparison period. EBIT for H1 2024 came to DKK 5 million, up from DKK negative 4 million last year.

In July 2024, 21 houses were delivered, and 50 units were sold compared to 32 deliveries and 40 sales in July 2023.

Semi-detached houses

In Q2 2024, revenue amounted to DKK 91 million, down from DKK 130 million in Q2 2023 and with ASP declining to DKK 1.5 million from DKK 2.1 million last year due to the mix in deliveries. Deliveries came to 33 compared to 73 last year, due to lower sales in previous quarters. The share of own land deliveries was 27.3% against 23.3% in Q2 2023. Sales increased significantly to 140 units from 9.

In H1 2024, revenue came to DKK 192 million, down from DKK 247 million last year, while ASP amounted to DKK 1.6 million, down from DKK 1.8 million in H1 2023. Deliveries totalled 71 units compared to 145 units last year. The share of own land deliveries was 22.5%, down from 23.4% last year. 228 units were sold, up from 101 units in H1 2023.

The Q2 2024 gross margin increased to 25.9% from 23.8% in Q2 2023 despite the lower ASP, and EBITDA was DKK 3 million, down from DKK 14 million. In H1 2024, gross margin was 32.5%, up from 25.8% in H1 2023, for an EBITDA of DKK 22 million, down from DKK 30 million. Q2 2024 EBIT was DKK 2 million against DKK 13 million last year. EBIT for H1 2024 came to DKK 19 million, down from DKK 27 million in H1 2023.

No semi-detached housing units were delivered in July 2024, while 32 units were sold against no deliveries and 2 sales in July 2023.

Wooden houses

Revenue in Q2 2024 amounted to DKK 27 million compared to DKK 82 million last year with ASP of DKK 1.1 million against DKK 1.6 million last year. Deliveries were 22, down from 50 in Q2 2023. 27 housing units were sold, down from 41 last year

H1 2024 revenue was DKK 54 million, down from 175 million. ASP came to DKK 1.3 million against 1.4 million last year. 39 units were delivered, down from 122 units in H1 2023. 39 units were sold compared to 57 in H1 2023.

Q2 2024 gross margin was 46.4%, up from 30.6% in Q2 2023, aided by delivery of a show house. EBITDA came to DKK 1 million, down from DKK 7 million. H1 2024 gross margin was 43.5%, compared to 33.9% in H1 2023, with EBITDA of DKK 0 million, down from DKK 15 million.

In Q2 2024, EBIT reached negative DKK 1 million against DKK 6 million last year. EBIT for H1 2024 was negative DKK 4 million, down from DKK 12 million in H1 2023. 

In July 2024, 2 houses were delivered, and 9 units were sold in the Swedish Wooden houses segment compared to 4 deliveries and 2 sales in July 2023.

Outlook for 2024

Based on the H1 financial performance and expectations for the remainder of 2024, the guidance issued on 8 March 2024 is narrowed:

• Revenue is expected to be DKK 2.3-2.4 billion (previously DKK 2,300-2,600 million)
• EBITDA is expected to be DKK 90-120 million (previously DKK 80-130 million)
• Operating profit (EBIT) is expected to be DKK 40-70 million (previously DKK 30-80 million)

Assumptions for the outlook

The 2024 guidance is based on no severe disruption of supply chains emerging and on raw material prices not significantly exceeding current levels.

• Current expectations for 2024 deliveries are between 850 and 950

General assumptions

General assumptions comprise assumptions relating to macro-economic conditions, industry considerations, regulatory changes, and customer behaviour. The Group’s estimates assume that there will not be any material change in the competitive or regulatory landscape, and no other external actions.   

Forward-looking statements

This interim report includes forward-looking statements on various matters, such as expected earnings and future strategies and expansion plans. Such statements are uncertain and involve various risks, as many factors, some of which are beyond our control, may result in actual developments differing considerably from the set expectations. Such factors include but are not limited to general economic and business conditions, exchange rate and interest rate fluctuations, the demand for our services and competition in the market.

Risk factors

HusCompagniet is exposed to strategic, operational, and financial risks, which are described in the management review and the 2023 Annual Report prepared in accordance with IFRS.

Statement by Management

The Board of Directors and the Executive Board have reviewed and approved the interim condensed consolidated financial statement of the Group for the period 1 January – 30 June 2024. The interim condensed consolidated financial statement, which has not been audited or reviewed by the Company’s auditor, has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the EU, and additional Danish disclosure requirements for interim financial reporting of listed companies.

It is our opinion that the interim condensed consolidated financial statement gives a true and fair view of the financial position for the Group on 30 June 2024 and the results of the Group’s operations and cash flows for the period 1 January – 30 June 2024.

Further, in our opinion, the Management's review gives a fair view of the development in the Group's activities and financial matters, results of operations, cash flows and financial position as well as a description of material risks and uncertainties that the Group face.

Virum, 23 August 2024

Executive Board:

Martin Ravn-Nielsen                                    Allan Auning-Hansen

Group CEO                                                 Group CFO

Board of Directors:

Claus V. Hemmingsen                                Anja B. Eriksson

Chairperson                                                Vice chairperson

Stig Pastwa                                                Ylva Ekborn

Ole Lund Andersen                                    Michael Troensegaard Andersen