Hornbach shows stamina in a tough climate
DIY megastores and garden centers face up to recession in Europe / As expected, earnings fall short of previous year’s figures / Market share extended both at home and abroad / Five new stores opened / Hornbach invests Euro 150 million / Extremely long winter impedes 2013/2014 spring season
Frankfurt/Main, May 28, 2013. The Hornbach Group increased its sales by 0.8 percent to Euro 3.229 billion in the 2012/2013 financial year (March 1, 2012 to February 28, 2013). Consistent with expectations, the Group’s operating earnings (EBIT) of Euro 145.9 million fell short of the previous year’s record figure of Euro 169.1 million. Albrecht Hornbach, Chairman of the Board of Management, sees the increasingly severe recession and its negative impact on consumer confidence across large parts of Europe since 2012 as the main reason for this development. “We showed great stamina in an extremely tough macroeconomic climate. Thanks to our five new stores, we achieved a further slight improvement in our consolidated sales. Given the weaker like-for-like sales performance of our international stores due to economic factors, however, we were unable to match the very strong earnings posted for the previous year.”
At the presentation of the annual results in Frankfurt, Hornbach voiced his pride regarding the Group’s performance in Germany. Here, the country’s third-largest DIY player had significantly outperformed the overall do-it-yourself (DIY) sector and expanded its market share. On a like-for-like, basis, i.e. excluding newly added locations and extensions, the Hornbach DIY megastores with garden centers in Germany once again matched the very high sales generated in the 2011/2012 financial year. The 5.8 percent jump in sales in the previous year had marked the strongest growth in Germany in the past 20 years. Outside Germany, like-for-like sales fell by 3.2 percent. “Thanks to our respectable performance in Germany, we managed to keep the group-wide downturn in comparable store sales by 1.4 percent well in check”, commented Albrecht Hornbach.
No longer a “normal DIY store”
Sales at the Hornbach-Baumarkt-AG subgroup rose by 0.6 percent to Euro 3.02 billion. Compared with the robust performance in Germany, consumer confidence in many international regions was directly affected by the European sovereign debt crisis. Hornbach nevertheless clearly outperformed its competitors in almost all of its international markets. “With our sustainable strategy and our unmistakable concept, that makes project customers the focus of all our efforts, we are now anything but a ‘normal DIY store‘“, added Hornbach. By offering high-quality, modern furnishing and fitting ranges, such as the ”Bathroom House” and the “Kitchen Center”, Hornbach stores had moved far beyond past DIY store clichés. The company intends to further build on this high standard, both in terms of the quality of its products and of the wide range of services on offer, such as the tradesman, paint mixing and picture framing services, as well as services offered by the online store, such as the “Reserve on line and pick up at the store” service.
Other parts of the Group reported improvements, in some cases substantial, in their sales and earnings. The HORNBACH Baustoff Union GmbH subgroup, which operates 25 regional builders’ merchant outlets in south-western Germany, increased its sales by 3 percent to Euro 207.3 million and its operating earnings (EBIT) by more than 21 percent to Euro 4.6 million. The HORNBACH Immobilien AG subgroup improved its EBIT by 19 percent to Euro 46.4 million.
Germany’s top-performing online DIY store and garden center
“Notwithstanding the subdued consumer climate across large parts of Europe, we invested a double-digit million sum in key forward-looking projects in the past financial year”, explained Hornbach. “That is because we think and act on a long-term basis.” First and foremost, these projects included developing and expanding the online store at www.hornbach.de. According to Hornbach, this is considered Germany’s largest and top-performing virtual DIY store given its range of more than 50,000 products, i.e. virtually the entire stationary product range, and its impressive service offering. Not only that, the company would increasingly benefit in future from megatrends such as energy-efficient building renovation, contemporary interiors, and barrier-free construction and renovation.
The Hornbach Group’s workforce grew by 4.1 percent to 14,913 employees in the 2012/2013 financial year. Most of the new jobs, numbering almost 600 in total, were created at the four new stores opened in Sweden, Romania, Switzerland, and Oberhausen/Germany. Furthermore, the store in Bremen/Germany was replaced by a large newly built megastore.
The equity ratio at the Hornbach Group rose from 45.9 percent to 48.3 percent at the balance sheet date on February 28, 2013. The dividends to be paid by Hornbach Holding AG (Euro 0.64 per ordinary share and Euro 0.67 per preference share) and Hornbach-Baumarkt-AG (Euro 0.50 per share) should remain unchanged on the previous year.
Long winter places damper on new season start
The first months of the new financial year have been a race to catch up. “The winter, which in some parts of Europe lasted into May, literally froze customer demand in the European DIY sector. We have never seen a start like this to a new financial year,” remarked Hornbach, but expressed his confidence that the company would make up lost ground as the year progressed. The Hornbach Group is nevertheless cautious in the assessment provided in the outlook section of its newly presented Annual Report. Consolidated sales for the 2013/2014 financial year, including sales at three new stores and one planned replacement location, are thus expected to “slightly exceed” the previous year’s figure. According to the forecast, operating earnings (EBIT) at the Hornbach Holding AG Group will “more or less match or fall slightly short of the level reported for the 2012/2013 financial year (Euro 145.9 million)”. In 2013/2014, the Hornbach Group plans to make investments in a range of between Euro 150 million and Euro 200 million.
Key earnings figures of the Hornbach Group (Hornbach Holding AG Group)
|Key figures of the Hornbach Holding AG Group |
Key figures of the Hornbach Holding AG Group
|of which Hornbach-Baumarkt-AG subgroup||3.,020.0||3,001.0||0.6|
|- Other European countries||1,279.4||1,272.1||0.6|
|Like-for-like sales growth (DIY)||-1.4%||2.8%|
|of which: Hornbach Baustoff Union GmbH subgroup||207.3||201.5||2.9|
|Gross margin (as % of net sales)||36.5%||36.5%|
|of which: Hornbach-Baumarkt-AG subgroup||99.3||128.4||-22.7|
|of which: Hornbach Immobilien AG subgroup||46.4||39.0||19.0|
|of which: Hornbach Baustoff Union GmbH subgroup||4.6||3.8||21.1|
|Earnings per Holding preference share (in Euro) – WKN 608343||4.08||4.79||14.8|
|Misc. key figures of the Hornbach Holding Group||February 28, 2013||February 29, 2012||±|
|Shareholders’ equity as % of total assets||48.3%||45.9%|
|Number of DIY stores with garden centers||138||134|
|Sales area of DIY stores with garden centers in 000 m² (BHB)||1,598||1,549||3.2|
|Number of employees||14,913||14,320||4.1|
(Differences due to rounding up or down to nearest Euro million; percentage changes calculated on basis of Euro 000s)
Head of Group Communications
T +49 (0) 6348-60-2444
F +49 (0) email@example.com
“There is still very great demand at DIY stores!”
Composition of Board of Management: Hornbach builds on healthy mix of continuity and change in its boardroom