Hornbach Holding AG: Earnings now ahead of previous year after sprint to catch up

Earnings now ahead of previous year after sprint to catch up

Hornbach publishes nine-month report 2013/2014:

- Hornbach Group increases sales by 2.9 percent to Euro 2.7 billion

- DIY stores and garden centers with further pleasing like-for-like sales growth

- Nine-month operating earnings (EBIT) up 0.3 percent to Euro 173.5 million

Neustadt a. d. Weinstrassee, December 20, 2013.
The Hornbach Group (Hornbach Holding AG Group) sprinted to make up lost ground in the third quarter of 2013/2014 (September 1, 2013 to November 30, 2013). By the end of the first nine months, the Group had completely made up for the weather-related shortfall in earnings from the first quarter. The Group increased its third-quarter sales by 5.1 percent to Euro 851 million, while its sales for the first nine months of 2013/2014 increased by 2.9 percent to Euro 2.7 billion. Operating earnings (EBIT), which at the end of the first half had still lagged around Euro 15 million behind, returned to year-on-year growth. EBIT totaled Euro 35.3 million in the third quarter (plus 78.3 percent) and Euro 173.5 million in the first nine months (plus 0.3 percent).

Hornbach-Baumarkt-AG, the largest operating subgroup (DIY retail) boosted its sales by 5.6 percent to Euro 788 million in the third quarter of 2013/2014. In the first nine months, Hornbach's DIY megastores with garden centers increased their sales by 3.0 percent to Euro 2.5 billion. On a like-for-like basis and net of currency items, third-quarter sales were 4.6 percent ahead of the previous year's figure. This like-for-like sales growth was driven by the DIY stores and garden centers both in Germany and in other European countries. Thanks to this pleasing performance, nine-month adjusted sales returned to their growth course (plus 0.8 percent), compared with a downturn of 0.8 percent in the first half of the year.

Germany once again provided the greatest growth momentum. Third-quarter sales at the DIY stores and garden centers here grew by 7.7 percent to Euro 457 million (2012/2013: Euro 424 million). Like-for-like sales for the same period rose by 7.0 percent. Cumulative sales for the first nine months increased by 3.4 percent to Euro 1,443 million, and by 2.6 percent on a like-for-like basis. Hornbach's stores in Germany thus continued to significantly outperform the sector average and expanded their market share.

DIY sales outside Germany (other European countries) grew 2.8 percent to Euro 331 million in the third quarter of 2013/2014 and by 2.4 percent to Euro 1,058 million in the first nine months. Like-for-like sales net of currency items also showed pleasing momentum in other European countries, rising by 1.5 percent in the third quarter, compared with growth of 0.5 percent in the previous quarter. As a result, adjusted sales growth improved from minus 2.9 percent in the first half to minus 1.5 percent in the first nine months. Following one new store opening in the Netherlands in the third quarter of 2013/2014, Hornbach was operating 141 DIY megastores with garden centers in nine countries across Europe as of November 30, 2013, of which 92 stores in Germany. One new large-format replacement location is scheduled to open in Heidelberg in February 2014.
At Euro 62.5 million, third-quarter sales at the Hornbach Baustoff Union GmbH subgroup matched the previous year's figure and increased by 1.3 percent to Euro 179.8 million in the first nine months of 2013/2014 (2012/2013: Euro 177.5 million).

Thanks in particular to pleasing like-for-like sales growth at the DIY stores and garden centers in conjunction with a higher gross margin, the Hornbach Group significantly improved its earnings performance in the third quarter of 2013/2014. Consolidated operating earnings (EBIT) for the third quarter rose from Euro 19.8 million in the previous year to Euro 35.3 million. At Euro 173.5 million, nine-month EBIT were thus slightly ahead of the previous year's figure (plus 0.3 percent). In the first nine months, the Hornbach Group therefore made up for all of the year-on-year shortfall, which at the end of the first six months had still amounted to Euro 14.9 million (minus 9.7 percent).

The full-year sales and earnings forecast for 2013/2014 remains unchanged. Accordingly, the Hornbach Holding AG Group expects to achieve slight year-on-year sales growth and expects its EBIT for 2013/2014 to at least match the level in the 2012/2013 financial year (Euro 145.9 million).
 

Note: The extensive interim reports of Hornbach Holding AG and Hornbach-Baumarkt-AG can be downloaded from the internet at: www.hornbach-group.com/reports.
 

Key Figures for the 3^rd Quarter and First Nine Months at a Glance

Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on Euro 000s.

¹⁾ currency-adjusted