HORNBACH defies sector trend and posts growth in Germany

26 juni 2008Corporate news announcement processed and transmitted by Hugin ASA. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- Successful start to 2008/2009 financial year: - Sales at HORNBACH Group grow by 6.1 % to ¤ 777.7 million - Like-for-like sales well ahead of German sector average - Disproportionate EBIT growth to ¤ 66.9 million - Positive outlook for overall financial year Bornheim bei Landau, June 26, 2008. The HORNBACH Group, one of Europe's largest operators of DIY megastores and garden centers, has started the 2008/2009 financial year on a successful note. Net sales at HORNBACH HOLDING AG rose by 6.1 % in the first quarter (March 1 to May 31, 2008) to reach ¤ 777.7 million (previous year: ¤ 732.7m). Sales at the largest operating subgroup, HORNBACH-Baumarkt-AG, grew by 6.2 % to ¤ 739.2 million (previous year: ¤ 696.0m). Like-for-like sales (excluding newly opened stores) improved by 1.5 % across the Group, rising by 0.6 % in Germany, thus defying the trend in the overall sector, and even rising by 2.9 % elsewhere in Europe. "All in all, we are very satisfied with the first quarter", commented Albrecht Hornbach, Chairman of the Board of Management of HORNBACH HOLDING AG. The months of March and April had been notably cooler and wetter than in the previous year. Business had been rather subdued in this period compared with the double-digit sales growth reported in some cases in March and April of the previous year. "But our sails then unfurled in May, when warm, dry weather called numerous gardening enthusiasts out of hibernation, providing a major boost to demand for gardening products and plants at our stores." "I am especially proud of the fact that we managed to increase like-for-like sales in Germany by 0.6 %, notwithstanding the very high comparable figures seen in the first quarter of the previous year", stressed Hornbach. "This has enabled us to outperform the sector average by around five percentage points, providing the best proof that our concept is on track and accepted by customers." HORNBACH would continue to grow and would also acquire additional market share in the highly contested German marked, added Hornbach. The earnings of the HORNBACH Group developed very positively in the first quarter. Operating earnings (EBIT) at HORNBACH HOLDING AG grew by 72.3 % to ¤ 66.9 million (previous year: ¤ 38.8m). Consolidated earnings before taxes jumped by 91.0 % to ¤ 58.5 million (previous year: ¤ 30.6m). Earnings per preference share (basic) have been reported at ¤ 4.87 (previous year: ¤ 2.18). "This pleasing growth in our key earnings figures was mainly due to like-for-like sales growth in Germany in conjunction with a slightly higher gross margin, as well as to improved store and administration cost ratios. Put more simply, this means we have significantly increased our operating earnings power compared with the previous year," said Hornbach. What's more, a successful land development project in Austria enabled us to significantly improve earnings in the real estate segment as well." Following extraordinary depreciation on real estate projects, this had benefited the earnings of the HORNBACH HOLDING AG Group to the tune of ¤ 10.7 million. Operating earnings at the largest subgroup, HORNBACH-Baumarkt-AG, rose by 49.4 % to ¤ 48.4 million (previous year: ¤ 32.4m). Consolidated earnings before taxes increased by 59.9 % to ¤ 43.6 million (previous year: ¤ 27.3m). Basic earnings per share amount to ¤ 2.03 (previous year: ¤ 1.26). HORNBACH continues to act as a job machine. Its total workforce rose by 2.6 % to 12,912 in the first quarter of 2008/2009, up from 12,587 in the equivalent period in the previous year. The Group invested ¤ 35.2 million, mainly in land and buildings, in the first three months of the financial year. Investments were lower than in the previous year (¤ 68.8m), as no new DIY megastores with garden centers were opened in the first quarter. Five new openings planned Having said this, preparations are progressing at full steam on the five new stores which HORNBACH intends to open by the end of the current financial year. A second store in Bucharest and a store in Stockholm are set to open in July already. Moreover, new stores are also currently under construction in Hamburg, Biel (Switzerland) and Brasov (Rumania). HORNBACH currently operates 125 DIY megastores with garden centers in nine European countries. The average store size amounts to almost 11,100 m². There are 91 locations in Germany, while the international stores are distributed as follows: Austria (11), Netherlands (8), Luxembourg (1), Czech Republic (6), Switzerland (3), Sweden (2), Slovakia (2) and Rumania (1). Albrecht Hornbach affirmed the positive outlook for the current financial year already issued at the Annual Results Press Conference at the end of May. "We expect to see sales growth in a medium single-digit range. Operating earnings (EBIT) are expected to show significantly disproportionate growth compared with sales and to surpass the figure reported for the 2006/2007 financial year. We aim to achieve this by increasing our earnings power in our core business, as well as by generating significant earnings growth in our real estate segment." The most important key figures can be found on the following page. The extensive interim reports of HORNBACH HOLDING AG and HORNBACH-Baumarkt-AG have been published in the Investor Relations section of the internet pages of the HORNBACH Group at www.hornbach-group.com. Overview of Key Figures for 1st Quarter (March 1 to May 31) HORNBACH HOLDING AG Group 1st Quarter 1st Quarter Change (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 777.7 732.7 6.1 of which in other European countries 294.6 260.7 13.0 Gross margin as % of net sales 36.1% 36.0% EBITDA 84.1 58.0 45.0 EBIT 66.9 38.8 72.3 Consolidated earnings before taxes 58.5 30.6 91.0 Consolidated net income * 45.9 21.4 114.1 Earnings per preference share in ¤ 4.87 2.18 123.4 Number of employees 12,912 12,587 2.6 Investments 35.2 68.8 -48.8 Total assets 2,056.5 1,966.5 4.6 Shareholders' equity 736.9 652.9 12.9 Shareholders' equity as % of total assets 35.8% 33.2% * pursuant to IFRS including minority interests. HORNBACH-Baumarkt-AG Subgroup 1st Quarter 1st Quarter Change (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 739.2 696.0 6.2 of which in other European countries 294.5 260.7 13.0 Like-for-like sales growth 1.5% 4.6% Gross margin as % of net sales 36.7% 36.5% EBITDA 62.2 48.6 28.0 EBIT 48.4 32.4 49.4 Consolidated earnings before taxes 43.6 27.3 59.9 Consolidated net income 31.8 19.5 62.6 Earnings per share in ¤ 2.03 1.26 - Number of employees 12,304 12,005 2.5 Investments 12.8 23.3 -45.1 Total assets 1,470.2 1,410.7 4.2 Shareholders' equity 549.8 491.8 11.8 Shareholders' equity as % of total assets 37.4% 34.9% Number of stores 125 123 1.6 Sales area in 000 m² (based on BHB) 1,385 1,351 2.5 Average store size in m² 11,079 10,981 0.9 Rounding up or down may lead to discrepancies between totals. Percentages calculated on basis of ¤ 000s. About HORNBACH The HORNBACH Group is one of Europe's largest operators of DIY megastores with garden centers. In addition to the largest operating subgroup, HORNBACH-Baumarkt-AG (DIY megastores with garden centers), the overall HORNBACH HOLDING AG Group also comprises the subgroups of HORNBACH Baustoff Union GmbH (regional builders' merchant and construction materials business) and HORNBACH Immobilien AG (real estate and location development). The HORNBACH DIY megastores with garden centers have an average size of more than 11,000 square meters, a figure unmatched by any other competitor in Europe. The HORNBACH Group generated sales of more than ¤ 2.6 billion in the past 2007/2008 financial year (March 1, 2007 to February 29, 2008). This is equivalent to growth of 2.9 % on the previous year. The company's market share in Germany rose during the financial year from 8.1 % to 8.3 %. The 34 international stores contributed almost 40 % of total DIY store sales. Founded in 1877, the family-run company, which has its roots in the Palatinate region, was first publicly listed in 1987. HORNBACH currently operates 125 DIY megastores with garden centers in nine countries, of which 91 are in Germany. The other countries are Austria, the Netherlands, the Czech Republic, Switzerland, Sweden, Slovakia, Luxembourg and, since June 2007, Rumania. HORNBACH's sales concept and product range are entirely tailored to the needs of project and professional customers. HORNBACH guarantees its customers permanently low prices and is thus the price leader in the sector. The high quality of advice and excellent service provided by the company have been attested in numerous independent tests and studies. HORNBACH was awarded the German Retail Prize in 2006 for the management achievement of the year. Last year, Otmar Hornbach, pioneer and founder of the DIY company, received the top prize awarded by the Federal Association of German DIY, Home Improvement and Specialist Garden Stores (BHB) - the "Life Time Award" - for his life's achievement. Pioneering achievements, such as the first combined DIY store with a garden center (1968), the first megastore (1980) and the first DIY store with a drive-in facility (2003), provide proof of HORNBACH's ongoing innovative power. Since 2001, a strategic partnership has been in place with the British retail group Kingfisher. HORNBACH has acted as a "job machine" for decades, with almost 13,000 individuals now employed at the Group. --- End of Message --- HORNBACH HOLDING AG Le Quartier Hornbach 19 Neustadt an den Weinstraße Germany WKN: 608343; ISIN: DE0006083439 ; Index: CDAX, Prime All Share, SDAX; Listed: Prime Standard in Frankfurter Wertpapierbörse, Amtlicher Markt in Frankfurter Wertpapierbörse;