As expected, the Group's operating earnings (EBIT) for the period from March 1 to August 31, 2009 decreased to ? 130.1 million, down 8.1 percent on 2008. This was because the company posted a high volume of non-operating real estate profits in the previous year, whereas no significant disposal gains are budgeted for the current year. Despite the difficult economic and competitive climate both in Germany and in the company's eight other country markets across Europe, Hornbach increased its earnings from operations alone by 13.6 percent. The company has thus posted a pleasing earnings performance for the first half of its financial year.

 

Hornbach's growth was driven above all by the 92 DIY megastores with garden centers in Germany, which boosted their like-for-like sales by 3.1 percent in the first half of the financial year (March 1 to August 31, 2009). The Federal Association of German DIY, Home Improvement and Specialist Garden Stores (BHB) reported a 1.1 percent decline in like-for-like sales across the sector in the first six months of the calendar year. By contrast, Hornbach's stores in Germany achieved like-for-like sales growth of 1.3 percent over the same period. Germany's fourth-largest DIY group has thus further expanded its share of the German market.

 

Hornbach Baustoff Union GmbH also posted a strong performance. Defying the clearly negative trend in the builders' merchant sector, this subgroup increased its first-half sales by 11.1 percent overall and by 4.1 percent on a like-for-like basis.

 

Shareholders' equity at the Hornbach Group grew by 9.3 percent to ? 852.9 million, or 39.9 percent of total assets. At the same time, cash and cash equivalents rose from ? 275.2 million to ? 418.9 million. These figures underline the company's solid financing policies, that focus on ensuring flexibility in managing the company and safeguarding its liquidity.

 

"These pleasing figures encourage us to uphold our strategies of quality leadership and permanent low prices. Hornbach caters to those aiming to tackle building, renovation or garden projects", explained Albrecht Hornbach, Chairman of the Board of Management of the Hornbach Group. That was why the company was working continuously on enhancing its combination of product range, permanent low prices and advice tailored to customers' needs. Hornbach sees the company's strategy as being confirmed by the results of the 2009 Kundenmonitor. This representative annual survey of customer satisfaction in Germany recently underlined Hornbach's leading position in the DIY sector once again. German DIY customers thus awarded Hornbach top positions both for quality and for its product range. "We are especially proud of our top position among all DIY players in terms of specialist advice", stressed Hornbach.

 

Sales at the Hornbach stores outside Germany grew by 5.2 percent to ? 614.9 million in the first half of the financial year. On a like-for-like basis, these stores matched the previous year's high figure. The international share of sales at the Baumarkt-AG subgroup reached around 41 percent.

 

Hornbach will be opening one further store in Switzerland, in Galgenen in the Zurich area, in the current financial year. The company will then operate 92 stores in Germany and 39 in other European countries. The stores have an average size of more than 11,250 square meters - according to Hornbach, this "warehouse concept" with huge product ranges and the stocking of large quantities is one of the secrets of the company's success.

 

Hornbach affirmed the forecast that the Group's sales would grow year-on-year in a "low to medium single-digit percentage range" by the balance sheet date on February 28, 2010. Notwithstanding its current expansion, which can be described as conservative in the best sense, the Hornbach Group will thus grow more rapidly than the DIY sector as a whole.

 

 

According to Albrecht Hornbach, one of the main reasons for the company's success is its focus on "project customers" - where the project in hand may involve building a garage or a garden pond, assembling and installing a sauna, new flooring, an attic extension or a bathroom renovation. This way, the company appeals to customers on the lookout for an extensive product range, excellent product quality, constant availability, and specialist advice. This is reflected in the title of the current autumn - "Make it your own project!"

 

The Hornbach Group invested ? 64.9 million in the first six months of the financial year (6.4 percent more than in the previous year). Investments were financed in full by the cash flow of ? 191.5 million from operations. The total workforce grew by 1.3 percent to 13,342 employees, around 8,300 of which working in Germany and 5,000 abroad.

 

 

 

 

 

 

1) currency-adjusted.

2) net of non-operating earnings items, the operative EBIT of the HORNBACH Group improved by 20.9% in the second quarter and by 13.6% in the first half of 2009/2010.

3) pursuant to IFRS including minority interests.

4) net of non-operating earnings items, the operative EBIT at this subgroup improved by 19.8% in the second quarter and by 11.5% in the first half of 2009/2010.

 

Rounding up or down may lead to discrepancies between percentages and totals. Percentages calculated on basis of ? 000s.