Hornbach Holding AG: Hornbach gains further market share in Germany

Figures presented for first six months of 2012/2013

Hornbach gains further market share in Germany

- Consolidated sales grow by 1.0% to Euro 1.8 billion

- Good earnings performance: previous year's figures virtually matched

- Further top ratings in Kundenmonitor Deutschland customer survey

- Store network grows by three new locations

Neustadt a. d. Weinstrasse, September 27, 2012. The Hornbach Holding AG Group (Hornbach Group) maintained its ground well in an increasingly tough economic climate in the first six months of the 2012/2013 financial year. Driven above all by a pleasing business performance in Germany, consolidated sales for the period from March 1 to August 31, 2012 grew by 1.0% to Euro 1,797.5 million. The Hornbach Group's first-half earnings have not yet reached the record previous year's figures - operating earnings (EBIT) slipped by 2.9% to Euro 153.2 million. By the end of the twelve-month period, however, the company expects to match the earnings reported for the past financial year.

'Measured against the previous year's strong results, our earnings performed well in the first half of the year. The slight decline in our earnings performance was due above all to two factors - subdued consumer confidence in large parts of Western and Eastern Europe alike and the extreme summer weather conditions', commented Albrecht Hornbach, Chairman of the Board of Management of Hornbach Holding AG.

Sales at the 137 outlets operated across Europe by Hornbach-Baumarkt-AG, the largest operating subgroup (DIY retail), grew 0.9% to Euro 1,681.9 million in the first half of the year. The record jump in sales in the first quarter of the previous year set a high standard for comparing the sales performance in the reporting period from March 1 to August 31, 2012. Despite this base effect, like-for-like sales net of currency items in the nine European countries covered by Hornbach's store network matched the previous year's figure.

'We are especially pleased with the strong performance of our DIY megastores with garden centers in our home market. After all, Germany is still by far our largest market. Here, we outperformed the competition yet again and gained further market share', remarked Albrecht Hornbach. Sales in Germany grew by 3.3% to Euro 467.5 million between June and August 2012 and by 1.5% to Euro 971.3 million in the first half. On a like-for-like basis, i.e. excluding stores newly opened or closed, our sales in Germany grew by 1.3% in the first half of 2012/2013, following growth of 2.8% in the second quarter. 'We can thus point to a more dynamic performance than our competitors in the current year as well', added Hornbach. 'Project customers are thrilled by our product ranges, prices and specialist advice. Given the current boom in the German residential construction and renovation market, these customers are particularly active.'

The popularity enjoyed by Germany's fourth-largest DIY player among home improvement customers is also documented in this year's Kundenmonitor Deutschland, the country's most renowned retail consumer survey. Based on the results published in September, customers singled out Hornbach once again in 2012 as the best DIY company in major categories such as value for money and product quality, as well as in the comparison of prices, service and product ranges with those offered by competitors.

Sales at the Hornbach stores in eight countries outside Europe showed a slight decline in the second quarter of 2012/2013 and matched the previous year's figure for the first six months as a whole. The shortfall in like-for-like sales net of currency items reduced from minus 2.4% in the first quarter of 2012/2013 to minus 1.8% in the second quarter. By the end of the first six months, like-for-like sales were 2.1% down on the previous year. The ongoing euro debt crisis and more pessimistic economic forecasts noticeably depressed consumer confidence among large sections of the population in parts of Western and Eastern Europe alike in the summer months. 'It is all the more pleasing to note that in some countries, such as Romania, we managed to generate like-for-like sales growth and to outperform the sector average in the first half of 2012/2013', said Hornbach.

The builders' merchant business reported even stronger growth in the first six months than the DIY megastores with garden centers at the Hornbach Group. Driven by growth of 6.4% in the second quarter of 2012/2013, sales at the Hornbach Baustoff Union GmbH subgroup for the first half of the year rose by 2.6% to Euro 114.8 million. The subgroup's EBIT increased even more sharply, rising by 13.9% to Euro 5.5 million. Hornbach Immobilien AG, the third company in the Group, also performed positively, improving its operating earnings for the first six months by 4.9% to Euro 23.4 million.

To account for the increase in macroeconomic uncertainty and deterioration in confidence among European consumers, the Group has made a slight downward revision to its full-year sales and earnings forecast for 2012/2013. The Hornbach Holding AG Group now expects to generate sales growth in a low single-digit percentage range and operating earnings (EBIT) at the same level as in the 2011/2012 financial year (Euro 169 million).

Having opened three new Hornbach stores in the first half of the financial year, namely in Sundbyberg (Sweden), Timisoara (Romania) and Riddes (Switzerland), in the second half the company plans to open new stores in Oberhausen and Bremen (replacement location). Hornbach continues to act as job machine. Since the balance sheet date on February 29, 2012, its total number of employees has risen by 452 to 14,772.

Key figures of the Hornbach Group for the 2^nd quarter and 1^st half 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

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.