Hornbach posts jump in first-quarter sales and earnings
Consolidated sales up 16.0 percent to Euro 1,035 million / Disproportionate earnings growth / EBIT up 70.8 percent to Euro 87.3 million / Forecast confirmed
Neustadt a. d. Weinstrasse, June 26, 2014.
The Hornbach Group (Hornbach Holding AG Group) has begun the 2014/2015 financial year on a highly dynamic note, posting record levels of first-quarter sales and earnings. Sales at the Hornbach Holding AG Group for the first three months (March 1 to May 31, 2014) rose 16.0 percent to Euro 1,035.1 million. After two new store openings in Lübeck and Prague, Hornbach-Baumarkt-AG, the largest operating subgroup, is now operating 143 DIY megastores and garden centers in nine European countries. Sales here grew by 16.4 percent to Euro 976.7 million. Group-wide like-for-like sales rose by 14.6 percent. First-quarter earnings showed even stronger growth. The Hornbach Group’s consolidated operating earnings (EBIT) jumped 70.8 percent to Euro 87.3 million. The Board of Management has confirmed the sales and earnings forecast for the 2014/2015 financial year as a whole.
The domestic business once again accounted for the strongest growth momentum. Like-for-like sales in all eight countries outside Germany were nevertheless also ahead of the previous year’s figures in the first quarter of 2014/2015. “Demand from DIY and home improvement customers at our stores virtually exploded in March 2014”, commented CFO Roland Pelka when presenting the quarterly results. “We not only made up for the downturn in earnings in the previous year’s quarter due to the severe winter but also stepped up a few extra gears.”
Given mild spring weather and a favorable macroeconomic backdrop, the Hornbach DIY megastores with garden centers in Germany improved their first-quarter sales by one fifth to Euro 574.5 million (2013/2014: Euro 478.9 million). Like-for-like sales in the domestic business increased by 19.4 percent, thus further significantly exceeding the strong sales momentum already seen in the fourth quarter of 2013/2014 (plus 14.1 percent). Germany’s third-largest DIY player also benefited from the consolidation in the DIY market in the wake of the closure of insolvent Praktiker and Max Bahr DIY stores.
In the international business, the positive trend apparent since the second quarter 2013/2014 intensified further in the first three months of the 2014/2015 financial year. Including recent new store openings, DIY sales in the eight countries outside Germany grew by 11.7 percent to Euro 402.1 million (2013/2014: Euro 360.0 million). Like-for-like sales net of currency items grew by 8.2 percent. On a regional level, Hornbach generated substantial sales growth in all countries. The international share of sales at the Hornbach-Baumarkt-AG subgroup most recently amounted to 41.2 percent.
The Hornbach Baustoff Union GmbH (HBU) subgroup, which focuses on the needs of professional customers in the main construction and subconstruction trades, as well as on private clients, increased its sales by 10.1 percent to Euro 58.0 million in the first quarter of 2014/2015 (2013/2014: Euro 52.7 million). As of May 31, 2014, HBU operated an unchanged total of 25 builders’ merchants outlets in south-western Germany and two locations close to the border in France (Lorraine).
Disproportionate earnings growth
As expected, high like-for-like sales growth in Germany and abroad together with an improvement in the gross margin and more favorable cost ratios resulted in significantly disproportionate earnings growth in the first quarter of 2014/2015. Operating earnings (EBIT) at the Hornbach Holding AG Group rose 70.8 percent to Euro 87.3 million (2013/2014: Euro 51.1 million). EBIT at the Hornbach-Baumarkt-AG subgroup virtually doubled to Euro 73.0 million (2013/2014: Euro 37.6 million).
Group CFO Roland Pelka has left the sales and earnings forecast for 2014/2015 unchanged. “The jump in sales and earnings in the first three months will be followed by three quarters in which we have to match the exceptionally high standards set in the previous year.” On the one hand, competitive pressure in Germany was due to increase once again in the coming months following the takeover of former Praktiker Group locations by other DIY players. On the other hand, the coming winter was unlikely to be as mild as last year. For the 2014/2015 financial year, the Group still expects to see sales growth in a medium single-digit percentage range and disproportionate operating earnings growth (EBIT) both at the Hornbach Holding AG Group and at the Hornbach-Baumarkt-AG subgroup.
Key Figures of the Hornbach Group for the 1st Quarter at a Glance
|Key figures of the Hornbach Holding AG Group|
(in Euro million, unless otherwise stated
|of which Hornbach-Baumarkt-AG subgroup||976.7||838.9||16.4|
|of which Hornbach Baustoff Union GmbH subgroup||58.0||52.7||10.1|
|of which Hornbach Baustoff Union GmbH subgroup||404.7||362.4||11.7|
|Like-for-like sales growth (DIY) 1)||14.6 %||-5.9 %|
|Gross margin (as percent of net sales)||37.7 %||36.7 %|
|Earnings per preference share (in Euro)||2.77||1.62||71.0|
|Misc. key figures of the Hornbach Holding AG Group||May 31, 2014||February 28, 2014||Change|
|Shareholders’ equity as percent of total assets||48.6 %||49.3 %|
|Number of DIY stores with garden centers||143||141||1.4|
|Sales area of DIY stores with garden centers in 000 m² (BHB)||1,669||1,647||1.3|
|Number of employees 2)||16,381||16,021||2.2|
1) net of currency items 2) head count at reporting date including persons in marginal employment
Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on Euro 000s.
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