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Hornbach Group publishes 2013/2014 Half-Year Report: Hornbach back on growth course after race to catch up

  • Consolidated sales return to positive growth of 1.8 percent in first half
  • DIY megastores and garden centers in Germany remain key growth driver – Other European countries gain momentum
  • Earnings shortfall from first quarter significantly reduced
  • DIY store network grows to 140 locations after two new openings
  • Hornbach with best results ever awarded in history of Kundenmonitor

Neustadt a. d. Weinstrasse, September 26, 2013.

Following a successful race to catch up during the summer months, the Hornbach Holding AG Group (Hornbach Group) returned to its growth course in the first half of its 2013/2014 financial year (March 1 to August 31, 2013). Consolidated sales for the first six months grew by 1.8 percent to Euro 1,830.6 million (2012/2013: Euro 1,797.5 million). The 6.8 percent jump in sales in the second quarter more than made up for the weather-related downturn in the first quarter (minus 2.9 percent). Group operating earnings (EBIT) grew disproportionately compared with sales in the second quarter. The Hornbach Group thus made up for around 40 percent of its shortfall in earnings from the first quarter, posting half-year EBIT of Euro 138.3 million (2012/2013: Euro 153.2 million). Having opened two new stores, the Group was operating 140 DIY megastores with garden centers across Europe as of August 31, 2013.

“Given the frosty spring season, what we achieved in the first half could by no means be taken for granted. In terms of our sales, we have not only made up the lost ground, but even exceeded the previous year’s figures. We owe this above all to our DIY megastores and garden centers in Germany, which once again left our competitors way behind and gained additional market share”, commented Albrecht Hornbach, Chairman of the Board of Management of Hornbach Holding AG, when presenting the company’s figures at its half-year press conference in Frankfurt.

The Hornbach DIY megastores with garden centers in Germany boosted their like-for-like sales by 7.7 percent in the second quarter of 2013/2014 and by 0.7 percent in the first half. Thanks to its consistent focus on project customers, Hornbach once again benefited from ongoing high demand in the German housing construction and renovation market. On a like-for-like basis, Hornbach exceeded the sales performance of the DIY sector as a whole by around three percentage points in the reporting period from March to August 2013. Albrecht Hornbach attributes this to the great popularity Hornbach’s DIY megastores with garden centers enjoy among German consumers.

Kundenmonitor 2013: Hornbach is Germany’s best DIY store operator

In Kundenmonitor Deutschland, the most prestigious consumer survey for the German retail sector, Hornbach was ranked first among DIY and home improvement stores in terms of overall satisfaction in 2013, receiving the best grade ever awarded in the 21-year history of this independent sector survey. Out of a total of 35 evaluation categories, Hornbach came first or second in 27 categories and was ranked first in 19 categories. These included top marks for value for money, prices compared with competitors, environmental focus, product selection and variety, product quality, up-to-dateness of product range, private labels, and repeat purchase willingness.

In its international business as well, the Hornbach Group made progress in the race to catch up in the summer months of 2013 – and that in significantly tougher macroeconomic conditions than in Germany. Like-for-like sales net of currency items in other European countries rose by 0.5 percent in the second quarter of 2013/2014, thus showing positive growth for the first time since spring 2011. “This enabled us to cut the 6.1 percent shortfall from the first quarter by more than half. That in turn gives us grounds to hope that the negative effects of the euro sovereign debt crisis are gradually receding in our international markets and that improved levels of consumer confidence are making themselves felt once again”, added Albrecht Hornbach.

The 140 DIY outlets operated by the Hornbach-Baumarkt-AG subgroup increased their total sales by 7.0 percent to Euro 873.5 million in the second quarter of 2013/2014 and by 1.8 percent to Euro 1,712.5 million in the first half as a whole. This subgroup’s like-for-like sales net of currency items grew by 4.6 percent in the second quarter, thus almost matching the previous year’s level by the end of the first half (minus 0.8 percent), and that in spite of the prolonged winter. EBIT at this subgroup also made up for lost ground in the second quarter and amounted to Euro 108.7 million in the first half of 2013/2014 (2012/2013: Euro 125.9 million).

The Hornbach Group’s builder’s merchant business increased its sales slightly in the first six months and has almost regained the previous year’s level of earnings. Sales at the Hornbach Baustoff Union GmbH subgroup thus grew by 2.2 percent to Euro 117.3 million in the first half. Cumulative EBIT at this subgroup now totals Euro 5.3 million (2012/2013: Euro 5.5 million). The third group company, the Hornbach Immobilien AG subgroup, improved its six-month operating earnings by 10.5 percent to Euro 25.9 million.

Given the race to catch up successfully launched in the second quarter, the Hornbach Group has slightly raised its earnings forecast. Accordingly, operating earnings (EBIT) at the Hornbach Holding AG Group for the 2013/2014 financial year as a whole are now expected to at least match the previous year’s figure (Euro 145.9 million) while EBIT at the Hornbach-Baumarkt-AG subgroup should be more or less in line with the previous year’s figure (Euro 99.3 million). The sales forecast, which has remained unchanged, provides for slight growth compared with the 2012/2013 financial year.

Key figures of the Hornbach Group for the 2nd quarter and 1st half at a glance

Key figures of the Hornbach Holding AG Group
(in Euro million, unless otherwise stated)
2nd Quarter
2013/2014
2nd Quarter
2012/2013
±
in %
2nd Quarter
2012/2013
1st Half
2012/2013
±
in %
Net sales938.6878.76.81,830.61,797.51.8
of which: Hornbach-Baumarkt-AG subgroup873.5816.77.01,712.51,681.91.8
- Germany506.8467.58.4985.7971.31.5
- Other European countries366.7349.35.0726.7710.62.3
Like-for-like sales growth (DIY)1)4.6%0.7% -0.8%-0.2% 
of which: Hornbach Baustoff Union GmbH subgroup64.761.65.0117.3114.82.2
Gross margin (as % of net sales)36.6%36.4% 36.6%37.0% 
EBIT87.177.812.0138.3153.2-9.7
Earnings per preference share (Euro)2.792.5111.24.394.83-9.1

Misc. key figures of the Hornbach Holding AG Group
(in Euro million. unless otherwise stated)
August 31, 2013February 28, 2013±
in %
Shareholders’ equity as % of total assets48.3%48.3% 
Number of DIY stores with garden centers140138 
Sales area of DIY stores with garden centers in 000 m² (BHB)1,6281,5981.9
Number of employees15,28714,9132.5

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

1) currency-adjusted

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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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