Hornbach posts record quarter
Consolidated sales grow by 17.8% to Euro 1,577.0 million in first quarter of 2020/21 / Adjusted EBIT up 78.4% to Euro 172.8 million / Forecast unchanged for now
Neustadt a. d. Weinstrasse, June 26, 2020.
The Hornbach Group (Hornbach Holding AG & Co. KGaA Group) began the 2020/21 financial year with substantial sales and earnings growth. Despite temporary restrictions on sales due to the coronavirus crisis, consolidated sales for the first quarter of 2020/21 (March 1 to May 31, 2020) grew by 17.8% to Euro 1,577.0 million. Sales at the largest operating subgroup, Hornbach Baumarkt AG (DIY retail), rose by 18.4% to Euro 1,492.1 million. With sales growth of 9.5% to Euro 84.5 million, the Hornbach Baustoff Union GmbH subgroup also contributed to the successful spring business performance of the Hornbach Group. This dynamic sales growth, accompanied by just a slight increase in expenses, led to a significant jump in earnings. EBIT adjusted to exclude non-operating earnings items (adjusted EBIT) showed clearly disproportionate growth compared with sales, rising by 78.4% to Euro 172.8 million. Earnings per Holding share came to Euro 6.06 at the end of the first three months (2019/20: Euro 3.15). Due to the ongoing risks, the full-year sales and earnings forecast remains unchanged for now.
At Hornbach Baumarkt AG, the largest operating subgroup (DIY retail) which operated an unchanged total of 160 DIY megastores with garden centers and online shops in nine European countries as of May 31, 2020, like-for-like sales net of currency items grew by 17.5% in the first three months.
Most Hornbach DIY stores with garden centers remained open to private and commercial customers throughout the coronavirus lockdown starting in mid-March 2020. Customer demand for DIY products at the stores that were open and the online shops was far higher than in the previous year’s quarter. This significantly overcompensated for the severe downturn in sales at those stationary stores subject to restrictions on sales in the first quarter of 2020/21. Most of the stores temporarily closed were able to reopen in the course of April. Since early May 2020, customers have once again been able to shop at all Hornbach stores in Germany and abroad.
Net sales at the HORNBACH DIY stores in Germany rose by 23.6% to Euro 808.4 million in the first quarter (2019/20: Euro 654.1 million). On a like-for-like basis, sales in Germany grew by 24.4% (2019/20: plus 6.9%). In the Other European Countries region, where the company’s DIY business activities in eight countries outside Germany are pooled, sales rose by 12.7% to Euro 683.7 million (2019/20: Euro 606.6 million). Due to the strong growth in the domestic business, the international share of sales at the Hornbach Baumarkt AG subgroup decreased from 48.1% to 45.8%. On a like-for-like basis and net of currency items, sales in other European countries increased by 10.3%.
The Hornbach Baustoff Union GmbH subgroup which, having taken over one new location in Saarland as of March 1, 2020, currently operates 33 builders’ merchant outlets in south-western Germany and two outlets close to the border in France (Lorraine), increased its sales by 9.5% to Euro 84.5 million (2019/20: Euro 77.2 million).
Sharp rise in adjusted operating earnings
In conjunction with more favorable cost ratios, the substantial sales growth led to a sharp increase in operating earnings (EBIT). The adjusted EBIT of the Hornbach Group improved by 78.4% to Euro 172.8 million (2019/20: Euro 96.9 million). Earnings per Holding share rose by 92.4% to Euro 6.06 (2019/20: Euro 3.15).
On the level of the Hornbach Baumarkt AG subgroup, adjusted EBIT increased by 90.2% to Euro 160.0 million in the first quarter of 2020/21 (2019/20: Euro 84.1 million). Earnings per Baumarkt share came to Euro 3.45 Euro (2019/20: Euro 1.63).
Forecast for 2020/21 financial year remains unchanged for now
The full-year sales and earnings forecast for 2020/21 as published in the 2019/20 Annual Report continues to apply for now. In this respect, the Board of Management points to the ongoing considerable and hardly predictable macroeconomic risks resulting from the coronavirus crisis and to the risk of a renewed wave of infections, particularly in the second half of the 2020/21 financial year. In light of these risks, the company is currently upholding its previous assessment that consolidated sales for the 2020/21 financial year as a whole will approximately match the level reported for the 2019/20 financial year (Euro 4.7 billion) and that adjusted consolidated operating earnings (adjusted EBIT) will fall slightly short of the previous year's figure (Euro 227.0 million).
“Our outlook is under review. We will be watching very closely how the coronavirus crisis impacts on consumers, the economy, and the Hornbach Group in the months ahead. Should we avoid any more major setbacks in the period ahead, then I see an ever greater likelihood that we will raise our sales and earnings forecast”, commented Albrecht Hornbach, CEO of Hornbach Management AG.
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 2020/21||1st Quarter 2019/20||Change|
|of which Hornbach Baumarkt AG subgroup||1,492.1||1,260.7||18.4|
|of which Hornbach Baustoff Union GmbH subgroup||84.5||77.2||9.5|
|of which in Germany||891.4||729.6||22.2|
|of which in other European countries||685.6||608.9||12.6|
|Like-for-like sales growth (DIY)||17.5%||7.8%|
|Gross margin (as percentage of net sales)||35.9%||36.2%|
|Earnings per Holding share (Euro)||6.06||3.15||92.4|
|Other key figures|
Hornbach Holding AG & Co. KGaA Group
|May 31, 2020||February 29, 2020||Change|
|Shareholders’ equity as percentage of total assets||42.4%||42.7%|
|Number of DIY stores with garden centers||160||160||0.0|
|Sales area of DIY stores with garden centers in 000 sqm (BHB)||1,889||1,889||0.0|
|Number of employees||22,349||21,505||3.9|
Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on Euro 000s.
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