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H+H International's Strategic Shift in German Operations

H+H International A/S, based in Copenhagen, has recently announced a major reorganization plan targeting its operations in Germany. CEO Jörg Brinkmann detailed the company's ongoing struggles in the German market during a press briefing on July 29, 2025. Despite efforts to enhance performance, the organization has found itself grappling with a difficult market characterized by low volumes and fierce competition.

Market Challenges

In his statement, Brinkmann acknowledged, "Despite significant improvement efforts over the past two years, our German operations continue to weigh heavily on the overall performance of the Group." This struggle has had a tangible impact on H+H's financial forecasts, leading the company to revise its expectations for the full year 2025. The updated outlook reflects a projected organic revenue growth of around 4%, down from the previously estimated 5-10%. In terms of EBIT before special items, the forecast has been reduced to a range of DKK 100-150 million, from an earlier estimate of DKK 120-180 million.

Analysts have pointed to the constrained environment in the German market, which shows little sign of recovery in the short to medium term. Pricing pressures and intense competition have exacerbated the situation, leading to a downward revision of the company's financial expectations for 2025.

Strategic Reorganization

In light of these challenges, H+H International has outlined a strategic reorganization of its German operations. The company plans to move from a national coverage model to a more localized, regional structure. This shift aims to enhance market focus, reduce costs, and improve margins. The closure of certain plants is also on the table, as the company seeks to streamline its operations for better effectiveness.

The anticipated restructuring will involve costs estimated between DKK 80-100 million, categorized as special items. However, H+H expects to realize significant savings—approximately DKK 20 million—by the second half of 2025. The overall plan includes a strategic review of its German activities to further support and improve profitability.

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With residential construction in Germany significantly lower than historical averages, H+H’s restructuring efforts will take a long-term approach to adapt to the shifting landscape. The company’s preliminary figures for the first half of 2025 indicated stagnated organic growth rates, confirming the need for decisive action.

Positive Developments Elsewhere

Interestingly, while Germany struggles, other markets are showing promise. H+H’s performance in Poland has remained stable, aided by a steady pipeline despite a decline in building permits. Optimism swells around the UK market, where demand has peaked, driving operations across all plants to run continuously, greatly contributing to the company's overall profitability in H1 2025.

As this reorganization unfolds, CEO Brinkmann, alongside CFO Bjarne Pedersen, will be addressing shareholders via a Teams call on July 30, 2025. Discussions will focus on the new strategy's implementation and future financial outlook. Stakeholders will be keenly watching how these changes will impact H+H's positioning in the challenging German landscape and if the anticipated improvements can materialize.

Despite current hurdles, H+H International’s proactive response highlights a commitment to enhancing operational efficiency and profitability, setting the stage for a resilient comeback.