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Hornbach confident about full-year 2018/19 despite subdued start to spring season

Consolidated sales up 2.7% to Euro 1,227.3 million in first quarter of 2018/19 / Adjusted EBIT down 14.8% to Euro 78.9 million / Forecast confirmed

Neustadt a. d. Weinstrasse, June 22, 2018.

Despite a weaker spring season due to weather conditions, the Hornbach Group (Hornbach Holding AG & Co. KGaA Group) is satisfied with its performance in the first quarter of 2018/19 and has confirmed its full-year sales and earnings forecast. Consolidated sales for the first quarter of 2018/19 (March 1 to May 31, 2018) grew by 2.7% to Euro 1,227.3 million (2017/18: Euro 1,195.5 million). As expected, together with a lower gross margin the more subdued sales growth compared with the previous year led earnings to fall short of the record level reported for the 2017/18 spring quarter. Adjusted for non-operating earnings items, adjusted operating earnings (adjusted EBIT) fell by 14.8% to Euro 78.9 million (2017/18: Euro 92.6 million). Three-month earnings per Holding share are reported at Euro 2.69 (2017/18: Euro 3.18). The Board of Management expects the company to make up in subsequent quarters for the seasonal shortfall in earnings in the first quarter.

Sales at Hornbach Baumarkt AG, the largest operating subgroup (DIY retail), grew by 2.8% to Euro 1,162.1 million (2017/18: Euro 1,130.3 million). This growth was due not least to the opening of two new DIY megastores with garden centers in Zwolle (Netherlands) and Affoltern (Switzerland) in the first quarter. One small-scale DIY store in Alzey (Rhineland-Palatinate) was closed due to a lack of development prospects. As of May 31, 2018, the total number of DIY retail outlets came to 157 (February 28, 2018: 156), of which 97 in Germany and 60 in other European countries.

Like-for-like, currency-adjusted sales at the subgroup rose by 2.3% in the first three months. “With growth of 5.4%, the standard set in the previous year was very high. The first quarter of the previous year offered ideal weather conditions for construction and renovation projects, but this year we were hit by an unfavorable start to the spring season due to wintry weather in March 2018. In the first quarter of 2018/19, we nevertheless managed to generate positive like-for-like sales growth, with this being due above all to the very dynamic performance of our business outside Germany”, comments CFO Roland Pelka.

At Euro 612.7 million, net sales at the Hornbach DIY stores in Germany virtually matched the previous year’s figure (Euro 613.4 million). On a like-for-like basis, domestic sales decreased by 0.2% (2017/18: plus 3.8%). By contrast, sales in the Other European countries region, in which Hornbach’s DIY activities in eight countries outside Germany are pooled, increased by 6.3% to Euro 549.4 million (2017/18: Euro 516.9 million). The international share of sales at the Hornbach Baumarkt AG subgroup increased from 45.7% to 47.3%. Like-for-like, currency-adjusted sales in other European countries rose by 5.2%, following sharp growth of 7.5% in the equivalent period in the previous year.

Sales in the builders’ merchant business were also held back by the prolonged winter. The Hornbach Baustoff Union GmbH subgroup, which currently operates 27 builders’ merchant outlets in south-western Germany and at two locations close to the border in France (Lorraine), nevertheless managed to match the previous year’s sales of Euro 64.6 million.

As expected, earnings below previous year’s record level

“Given the great impact of weather conditions, the spring season is known for its volatility. In the previous year’s quarter, strong sales and a higher gross margin enabled us to post exceptionally high earnings. In the first quarter of 2018/19, by contrast, conditions were exactly the opposite. Against this backdrop, we are satisfied that we nevertheless managed to meet our earnings targets in Q1. The return to a normalized earnings level fits in with the overall picture for the 2018/19 financial year”, stressed Roland Pelka.

Adjusted operating earnings (adjusted EBIT) at the Hornbach Holding AG & Co. KGaA Group fell 14.8% to Euro 78.9 million (2017/18: Euro 92.6 million). First-quarter earnings per Holding share decreased 15.4% to Euro 2.69 (2017/18: Euro 3.18). At the Hornbach Baumarkt AG subgroup, adjusted EBIT fell 16.3% to Euro 64.9 million (2017/18: Euro 77.5 million), while earnings per Baumarkt share dropped 18.0% to Euro 1.41 (2017/18: Euro 1.72).

The Board of Management has confirmed the full-year sales and earnings forecasts for 2018/19. It expects the shortfall in first-quarter earnings to be made up for in subsequent quarters. The Hornbach Group’s consolidated operating earnings adjusted for non-operating earnings items (adjusted EBIT) for the 2018/19 financial year as a whole are therefore still expected to more or less match the level reported for the 2017/18 financial year (Euro 165.6 million).

Key figures of the Hornbach Group for the 1st quarter at a glance

Key figures of the
Hornbach Holding AG & Co. KGaA Group

(in Euro million, unless otherwise stated)
1st Quarter 2018/191st Quarter 2017/2018Change
in %
Net sales1,227.31,195.52.7
of which Hornbach Baumarkt AG subgroup1,162.11,130.32.8
of which Hornbach Baustoff Union GmbH subgroup64.664.60.0
of which in Germany675.5676.4(0.1)
of which in other European countries551.8519.26.3
Like-for-like sales growth (DIY)2.3%5.4% 
Gross margin (as percentage of net sales)36.5%37.2% 
EBIT79.392.7(14.5)
Adjusted EBIT78.992.6(14.8)
Earnings per share (Euro)2.693.18(15.4)
Investments69.325.8>100

Other key figures
Hornbach Holding AG & Co. KGaA Group
May 31, 2018February 28, 2018Change
in %
Shareholders’ equity as percentage of total assets53.7%54.8% 
Number of DIY stores with garden centers1571560.6
Sales area of DIY stores with garden centers in 000 sqm (BHB)1,8451,8221.3
Number of employees20,04919,6142.2

Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on Euro 000s.

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Contact person

Axel Müller
Head of Group Communications

T +49 (0) 6348-60-2444

F +49 (0) 6348-60-4299

axel.mueller@hornbach.com

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HORNBACH Holding
Financial Update: 3rd Quarter of 2019/2020 as of November 30, 2019
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