DGAP-News: Hornbach Holding AG & Co. KGaA / Key word(s): Quarterly / Interim Statement/9 Month figures
Hornbach with program of contrasts in third quarter of 2018/19
Sales growth of 7.7% at highest level for four-and-a-half years in fall of 2018 / But: Higher costs hold back earnings performance in current financial year
The pace of sales growth accelerated from quarter to quarter as the 2018/19 financial year progressed. Sales at Hornbach Baumarkt AG, the largest operating subgroup which currently operates 158 DIY megastores with garden centers across Europe (DIY retail), grew by 7.5% to Euro 1,006.4 million in the third quarter and by 4.7% to Euro 3,256.1 million in the first nine months of 2018/19. This growing momentum in the course of the year is reflected in the development in like-for-like sales net of currency items. Having risen by 2.3% in the first quarter and 3.4% in the summer quarter, this key sales figure surged by 6.2% in the third quarter of 2018/19. "We really got going in the fall. In Germany, our DIY stores and megastores outperformed the sector each month and generated like-for-like growth of 4.4%" commented Albrecht Hornbach, CEO of Hornbach Management AG.
Albrecht Hornbach: "Our business model works."
The strongest growth momentum came once again from the Hornbach stores in the eight European countries outside Germany. Like-for-like DIY sales net of currency items at these stores grew by 8.2% in the third quarter of 2018/19. By the end of the first three quarters, the international share of the subgroup's sales came to 48.2% (2017/18: 46.7%). "Demand is growing. And our retail business works - despite all the prophecies of doom. We see digitalization as an enormous opportunity. By dovetailing e-commerce and our stationary business, we can offer more value to our customers than pure players, particularly when it comes to renovation projects where customers need detailed advice", stressed Albrecht Hornbach.
Hornbach was nevertheless not satisfied with the earnings performance in the third quarter. Consolidated operating earnings adjusted to exclude non-operating earnings items (adjusted EBIT) at the Hornbach Group fell by 31.5% to Euro 19.7 million in Q3 and by 11.1% to Euro 180.6 million in the first nine months of 2018/19 "Regrettably, we were unable to translate this acceleration in our sales into earnings growth. The cost growth, also in connection with our advancing digitalization, was just too high compared with the increase in our gross profit", commented Albrecht Hornbach. "But these are factors within our control and that we can ourselves change." That also applied to the further development in the gross margin, which decreased in the third quarter of 2018/19 due to higher procurement prices, write-downs, and logistics costs. According to Hornbach, the aim was to sustainably boost the Group's earnings strength following the recent dip in earnings.
At the Hornbach Baumarkt AG subgroup, adjusted EBIT for the first nine months of 2018/19 fell by 12.6% to Euro 134.3 million. The Hornbach Baustoff Union GmbH subgroup, which focuses in particular on the needs of professional construction customers, posted nine-month sales growth of 5.5% to Euro 217.7 million and adjusted EBIT of Euro 6.6 million (2017/18: Euro 8.8 million). At the Hornbach Immobilien AG subgroup, the nine-month adjusted EBIT of Euro 42.3 million virtually matched the previous year's figure (minus 1.8%).
As already announced in the ad-hoc announcement published on December 10, 2018, the full-year earnings forecast has been amended to account for the unsatisfactory earnings performance in the third quarter. Adjusted operating earnings (adjusted EBIT), and that both at the Hornbach Group and on the level of the Baumarkt subgroup, are now expected to fall more than 10% short of the respective previous year's figures. By contrast, the Board of Management has not made any amendments to the 2018/19 sales forecast, which foresees sales growth in a medium single-digit percentage range.
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 3rd quarter and 1st nine months at a glance
Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on EUR 000s.
1) Including minority interests pursuant to IFRS
Group Communications and Investor Relations Director
HORNBACH Holding AG & Co. KGaA
Tel. +49 (0) 6348 602444
20.12.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||Hornbach Holding AG & Co. KGaA|
|Le Quartier Hornbach 19|
|67433 Neustadt an der Weinstraße|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|End of News||DGAP News Service|