Hornbach Holding AG & Co. KGaA: Hornbach with successful start to financial year

Hornbach with successful start to financial year

Consolidated sales up 9.1 % to Euro 1,338.4 million in first quarter of 2019/20 /
Earnings strength boosted: adjusted EBIT up 22.8 % to Euro 96.9 million / Forecast confirmed

Neustadt a. d. Weinstrasse, June 28, 2019.
The Hornbach Group (Hornbach Holding AG & Co. KGaA Group) has begun the 2019/20 financial year with pleasing sales and earnings growth. Consolidated sales increased by 9.1 % to Euro 1,338.4 million in the first quarter of 2019/20 (March 1 to May 31, 2019). Sales at the largest operating subgroup, Hornbach Baumarkt AG (DIY retail), grew by 8.5 % to Euro 1,260.7 million. The Hornbach Baustoff Union GmbH subgroup contributed to the Hornbach Group's successful spring business performance with sales growth of 19.5 % to Euro 77.2 million. The notable acceleration in the rate of sales growth compared with the previous year, improved cost ratios, and positive conversion effects resulting from first-time application of the new IFRS 16 lease accounting requirements - all these factors led to a substantial increase in operating earnings (EBIT). EBIT adjusted to exclude non-operating earnings items (adjusted EBIT) showed disproportionate growth compared with sales, surging by 22.8 % to Euro 96.9 million. Three-month earnings per Holding share came to Euro 3.15 (2018/19: Euro 2.69). The full-year sales and earnings forecast has been confirmed.

Hornbach Baumarkt AG, the largest operating subgroup (DIY retail) which operated an unchanged total of 158 DIY megastores with garden centers and online shops in nine European countries as of May 31, 2019, increased its like-for-like sales net of currency items by 7.8 % in the first three months.

Net sales at Hornbach's DIY stores in Germany rose by 6.8 % to Euro 654.1 million in the first quarter (2018/19: Euro 612.7 million). Like-for-like sales in Germany grew by 6.9 % (2018/19: minus 0.2 %). Sales in the Other European Countries region, where Hornbach pools its DIY business activities in eight countries outside Europe, increased by 10.4 % to Euro 606.6 million (2018/19: Euro 549.4 million). The international share of sales at the Hornbach Baumarkt AG subgroup rose from 47.3 % to 48.1 %. On a like-for-like basis and net of currency items, sales in other European countries grew by 8.7 %.

"We are particularly pleased with our like-for-like sales growth in Germany. With growth of almost seven percent in the period from March to May 2019, Hornbach outperformed the DIY sector by around three percentage points", commented CFO Roland Pelka. Not only that, the company had managed to significantly increase its already high level of like-for-like, currency-adjusted sales outside Germany as well.

The Hornbach Baustoff Union GmbH subgroup which, having taken over three new outlets in Baden-Württemberg as of April 1, 2019, now operates 31 builders' merchant outlets in south-western Germany and at two locations close to the border in France (Lorraine), increased its sales by 19.5 % to Euro 77.2 million (2018/19: Euro 64.6 million).

Adjusted operating earnings rise 22.8 % to Euro 96.9 million in Q1
The substantial increase in operating earnings (EBIT) was, according to Roland Pelka, driven above all by the high rate of sales growth and more favorable cost ratios. Alongside these factors, operating earnings also benefited from first-time application of the new IFRS 16 lease accounting requirements.

The adjusted EBIT of the Hornbach Group improved by Euro 18.0 million, or 22.8 %, to Euro 96.9 million (2018/19: Euro 78.9 million). More than four fifths of this earnings growth was due to the operating business, while the IFRS 16 conversion effect contributed around Euro 3.2 million. Earnings per Holding share increased by 17.1 % to Euro 3.15 (2018/19: Euro 2.69).

On the level of the Hornbach Baumarkt AG subgroup, adjusted EBIT surged by 29.7 % to Euro 84.1 million in the first quarter of 2019/20 (2018/19: Euro 64.9 million). Earnings per Baumarkt share came to Euro 1.63 (2018/19: Euro 1.41).

Board of Management confirms forecast for 2019/20 financial year
The Hornbach Group's sales and earnings forecast for the 2019/20 financial year has been confirmed. The Board of Management thus continues to expect sales growth in a medium single-digit percentage range and an increase in EBIT adjusted to exclude non-operating earnings items (adjusted EBIT) by more than 15 % compared with the figure reported for the 2018/19 financial year (Euro 134.9 million). At the Hornbach Baumarkt AG subgroup, adjusted EBIT is expected to increase by more than 30 % (2018/19 financial year: Euro 81.9 million).


Note: The quarterly statements of Hornbach Holding AG & Co. KGaA and Hornbach Baumarkt AG can be downloaded from the "Publications" section of our website. Link: www.hornbach-group.com.

Key Figures of the Hornbach Group for the 1^st Quarter at a Glance

¹⁾ Figures for the 2019/20 financial year take account of first-time application of new IFRS 16 lease accounting requirements. Previous year's figures not adjusted.
Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on Euro 000s.