Hornbach with dividend hike
- Hornbach Group sales grow 5.1 % to Euro 3.76 billion
- Extraordinary charges on earnings lead EBIT to fall 17 % to Euro 138 million
- Company consistently pressing ahead with digitizing business model
- Dividend: Hornbach Holding AG & Co. KGaA raises payout ratio from 14 % to 30 %
Frankfurt/Main, May 24, 2016. The Hornbach Group has shown itself in robust shape. In the 2015/2016 financial year (March 1, 2015 to February 29, 2016), the HORNBACH Holding AG & Co. KGaA Group increased its sales by 5.1 % to Euro 3,755 million. Consolidated operating earnings (EBIT) fell year-on-year by almost 17 % to Euro 138 million (previous year: Euro 165.1 million). This drop in earnings was due to a weak third quarter of 2015/2016 and to non-operating one-off items in the fourth quarter. Irrespective of this, the Hornbach Group upheld its strategic course and boosted its investments in digitizing its retail business.
“Despite the difficult business performance in 2015/2016, the core of our Group’s operating growth is intact. Our stationary retail business is profitable and effective. We raised our surface productivity for the fourth consecutive year, setting a new record of more than Euro 2,000 per square meter of sales area at the Group. On this basis, we are continuing to invest closely in extending our digital strategy and thus lay a foundation for future growth. We will not be changing this course just because of the odd poor quarter or unpredictable year-end accounting item”, commented Albrecht Hornbach, Chairman, Board of Management of the general partner of Hornbach Management AG, when presenting the results in Frankfurt.
Hornbach Baumarkt AG, the most important subgroup that – following its latest opening in Innsbruck on Monday (May 23, 2016) – currently operates 154 DIY stores with garden centers in nine European countries, increased its sales by 5.3 % to Euro 3.53 billion in the 2015/2016 financial year (previous year: Euro 3.36 billion). Like-for-like sales net of currency items grew by 2.6 %. Operating earnings (EBIT) at the subgroup for the same period fell by 17.8 % to Euro 90.2 million. The main reasons for this are to be found in Germany, where the operating earnings performance was adversely affected by the weak third quarter (September 1 to November 30, 2015) and a lower gross margin. Furthermore, non-operating impairment losses (pursuant to IAS 36) of around Euro 12.6 million were charged almost exclusively to the subgroup’s earnings in Germany. By contrast, the international business posted a further cumulative increase in its earnings strength over the twelve-month period.
The Hornbach Baustoff Union GmbH subgroup maintained its long-term growth course in the past 2015/2016 financial year and once again exceeded the previous year’s sales. At Euro 218 million, net sales were 2.4 % were ahead of the year before. Here too, operating earnings were held back by impairment losses. Non-operating write-downs of minus Euro 3.7 million were the main reason for the reduction in EBIT to Euro 2.3 million (previous year: Euro 6.5 million). Net of this one-off item, the subgroup posted adjusted EBIT of Euro 6.0 million – the second-highest operating earnings in its history.
The Hornbach Immobilien AG subgroup contributed positively to the Hornbach Group’s earnings performance. Thanks to a slight year-on-year increase in rental income, lower real estate expenses, and non-operating, one-off write-ups (IAS 36), EBIT for the 2015/2016 financial year improved 5.8 % to Euro 54.5 million (previous year: Euro 51.5 million).
Long-term development strategy
The Hornbach Group showed in the past that, thanks to its unique retail format, it is able to offset downturns in sales in individual regions and rapidly make up for these with the breadth and dynamism of its country mix. “What’s more, we are convinced we are superbly prepared with our e-commerce strategy for the transformation currently underway in the retail world. Since 2010, we have cumulatively invested a triple-digit million euro sum in expanding our digital business model, of which almost Euro 50 million (previous year: Euro 35 million) in the past financial year alone”, added Albrecht Hornbach.
Hornbach’s long-term strategy also encompasses the conversion in the legal form of Hornbach Holding Aktiengesellschaft to a partnership limited by shares (KGaA) successfully executed in the past financial year. This has on the one hand created a flexible, simplified and forward-looking structure that has boosted the company’s position on the capital market. On the other hand, with this change in legal form the company’s founding family has secured its influence on the business management of the Hornbach Group for generations to come.
Consistent with the objectives of the future dividend policy announced by Hornbach Management AG in May 2015 in connection with the change in legal form, the general partner and the Supervisory Board of the KGaA will be proposing a dividend of Euro 1.50 per ordinary KGaA share for approval by the Annual General Meeting. This corresponds to an increase in the payout ratio to 30 % of consolidated net income after minority interests (previous year: 14 %). Prior to the change in legal form, the dividends paid by the former Hornbach Holding AG most recently came to Euro 0.80 per preference share and Euro 0.77 per ordinary share. Shareholders in Hornbach Baumarkt AG can also look forward to a higher distribution. Here, it is planned to raise the dividend by more than 13% to Euro 0.68 (previous year: Euro 0.60) per ordinary Baumarkt share.
Key figures of the Hornbach Group (Hornbach Holding AG & Co. KGaA Group)
|Key figures |
Hornbach Holding AG & Co. KGaA Group
(in Euro million, unless otherwise stated)
|of which Hornbach Baumarkt AG subgroup||3,534.8||3,356.5||5.3|
|- Other countries||1,524.3||1,390.3||9.6|
|Like-for-like sales growth (DIY)||2.6%||4.4%|
|of which Hornbach Baustoff Union GmbH subgroup||218.5||213.3||2.4|
|Gross margin (as % of net sales)||37.0%||37.3%|
|of which Hornbach Baumarkt AG subgroup||90.2||109.8||-17.8|
|of which Hornbach Immobilien AG subgroup||54.5||51.5||5.8|
|of which Hornbach Baustoff Union GmbH subgroup||2.3||6.5||-64.4|
|Consolidated earnings before taxes||113.0||139.7||-19.1|
|Consolidated net income||97.7||106.7||-8.5|
|Earnings per share (basic/diluted in Euro)||5.04||5.63||-10.5|
|Misc. key figures|
Hornbach Holding AG & Co. KGaA Group
|February 29, 2016||Feb. 28, 2015||±|
|Shareholders’ equity as % of total assets||49.8%||51.8%|
|Number of DIY stores with garden centers||153||146||4.8|
|Sales areas in 000 m² (BHB)||1,771||1,704||3.9|
|Number of employees||17,373||16,455||5.6|
Differences due to rounding up or down to nearest Euro million; percentage changes calculated on basis of Euro 000s.
1) Adjusted to exclude non-operating income and expenses
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