Hornbach Holding AG: Hornbach with slight growth

Hornbach with slight growth

Nine-month report 2012/2013 published

- Hornbach Group posts sales growth of 1%

- Operating earnings (EBIT) of Euro 173 million fall short of previous year's record

- Further increase in equity ratio

Neustadt an der Weinstrasse, Dec. 21, 2012. The Hornbach Group (Hornbach Holding AG) generated moderate growth in the first nine months of the 2012/2013 financial year (March to November 2012), but fell short of the previous year's record earnings figure. The Group increased its nine-month sales by 1 percent to Euro 2.6 billion. The significant increase in the equity ratio contrasted with a 9.5 percent drop in nine-month operating earnings (EBIT) to Euro 173.0 million. As communicated in an ad-hoc announcement on November 27, 2012, Hornbach has reduced its sales and earnings forecast for the Group to account for the deterioration in consumer confidence, especially outside Germany, in the second half of the year.

Hornbach-Baumarkt-AG, the most important subgroup, currently operates 138 DIY megastores with garden centers and generated sales growth of 0.8 percent to Euro 2.4 billion in the first nine months. In Germany, where Hornbach now operates 92 stores in total following the latest new opening in Oberhausen, sales grew by 0.8 percent. On a like-for-like basis, i.e. excluding sales areas newly added or decommissioned, Hornbach increased its domestic sales by 0.7 percent. Hornbach's stores outperformed the German sector average, in most cases significantly, in all months in the period under comparison between March and November 2012. Since summer 2012, however, the company has been unable to entirely escape the effects of sluggish consumer demand in the German retail sector. By comparison, the macroeconomic framework was less favorable in most of the eight countries outside Germany where Hornbach's 46 international stores are located. Due to the Group's expansion, sales in other European countries rose by 0.7 percent. However, like-for-like sales net of currency items fell 2.6 percent short of the previous year.

Builders' merchant business improves sales and earnings

The two other subgroups, Hornbach Baustoff Union GmbH (HBU) and Hornbach Immobilien AG, managed to improve on the previous year's earnings in the first nine months. With its 25 builders' merchants outlets in South-Western Germany, HBU posted sales of Euro 177.5 million (+3.8 percent), thus further expanding its strong position in the regional builders' merchants business. Operating earnings at this subgroup surged by 21.2 percent to Euro 8.4 million. The Hornbach Immobilien AG subgroup, which manages land and commercial properties, improved its operating earnings by 7.4 percent to Euro 34.7 million.

'That was a challenging nine-month period for our business. In some countries, such as Germany, Luxembourg and Romania, we managed to move slightly forward compared with the previous year, while in other countries we took a step backwards', commented Albrecht Hornbach, Group CEO. 'It goes without saying that, like every other international retail player in Europe, we too have felt the impact of faltering consumer confidence due to the uncertainties resulting from the sovereign debt crisis. We hope the politicians will be soon be able to get to grips with this challenge and that the European economy will regain momentum in the course of 2013.'

The Hornbach Group revised its full-year forecast in November already. The company, which has 14,900 employees across Europe, expects its consolidated sales for 2012/2013 to match the previous year's figure (Euro 3.2 billion). Operating earnings (EBIT) are set to fall short of the high standard set in the previous year (Euro 169 million).

In the first half of the 2012/2013 financial year, Hornbach opened three new DIY megastores, namely in Timisoara (Romania), Riddes (Switzerland), and Sundbyberg (Sweden). No new stores were opened in the third quarter. A newly built store in Oberhausen was then opened on December 12, 2012. This is set to be followed in February 2013 by a new store replacing an older location in Bremen.

The Hornbach Holding AG Group invested a total of Euro 106 million in the first nine months of 2012/2013, financing these investments in full from its operating cash flow (Euro 199 million). Total assets rose to Euro 2,391 million as of November 30, 2012, up 5.5 percent on the balance sheet date on February 29, 2012. Shareholders' equity grew over the same period by 7.9 percent to Euro 1,123 million. As a result, the equity ratio increased from 45.9 percent to 47.0 percent.

Key Figures of the Hornbach Group 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

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.