EQS-News: HORNBACH Group earnings further stabilized in Q3 2023/24

• Earnings development has further stabilized in Q3 2023/24 driven by improved gross margin (+1 %pt) and successful tight cost management
• Consolidated Group sales came in 4.0% below Q3 2022/23 due to ongoing consumer focus on small tickets and some pressure in big tickets and discretionary categories
• HORNBACH continued to increase market share in key international markets such as Czechia and the Netherlands
• Adjusted EBIT for the Group in Q3 2023/24 at EUR 48.1 million and only slightly below previous year (-1.7%) – 9M 2023/24 adjusted EBIT at EUR 269.4 million
  (-17.4%)
• Successful acquisition of Seniovo, a start-up focused on barrier-free bathroom conversions, strategically enhancing the trade offer in Germany
• Full-year 2023/24 outlook confirmed¹⁾ – mid to lower range of guidanceexpectedin line with consensus

 

Table 1: Key figures HORNBACH Holding AG & Co. KGaA Group

^{1) Guidance as of September 15, 2023: Sales: at or slightly below FY 2022/23 (EUR 6,263 million); adj. EBIT: -10% to -25% (EUR 290 million)}

^{2) Like-for like sales net of currency items; includes sales at all stores that have been open for at least one year and online sales}

^{3) Adjusted to exclude non-operating income and expenses}

^{4) Including minority interests pursuant to IFRS}

^{Rounding up or down may lead to discrepancies between percentages and totals. Percentage figures calculated on basis of EUR 000s.}

Bornheim (Palatinate), Germany, December 20, 2023.

HORNBACH Group (HORNBACH Holding AG & Co. KGaA Group; ISIN: DE0006083405) sequentially improved its earnings figures in the third quarter (Q3) 2023/24 (September 1, 2023 to November 30, 2023) through increased gross margin due to lower commodity and purchasing prices as well as effective cost management. Against the challenging backdrop of ongoing consumer caution in big ticket and discretionary spending, consolidated net sales of the Group decreased to EUR 1,485.2 million (-4.0%) in Q3 2023/24. In total, nine months (9M) 2023/24 net sales were slightly behind the previous year at EUR 4,926.5 million (-1.7%) and adjusted EBIT came in at EUR 269.4 million (-17.4%). The sales and earnings development to date has been significantly influenced by a relatively weaker Q1 2023/24 with cold and wet weather delaying the start of the main DIY and gardening season. HORNBACH Group confirms its full year outlook 2023/24 – net sales and adjusted EBIT are expected to be in the mid to lower range of the guidance published on September 15, 2023 in line with consensus.

"Despite the uncertain backdrop and the challenging macroeconomic conditions, we are seeing good engagement from customers in our stores, in our web shops and the HORNBACH app. Our business is performing well – especially outside Germany, where we continued to increase our market share. Tough times are DIY times and consumers continue to prioritize investments in their homes and we remain confident about the overall trajectory of our business. We have a great team of very committed colleagues and coupled with our leading ICR strategy and attractive price proposition we believe we are well positioned", says Albrecht Hornbach, Chairman of the Board of Management of HORNBACH Management AG.

HORNBACH Baumarkt grows sales outside Germany

HORNBACH Baumarkt AG, the largest operating subgroup (DIY retail) operated a total of 171 DIY megastores with garden centers and online shops in nine European countries as of November 30, 2023. Net sales in 9M 2023/24 came in close to the previous year’s level (-1.3%) at EUR 4,608.7 million (9M 2022/23: EUR 4,667.1 million). On a like-for-like basis and exchange rate adjusted, sales in the subgroup decreased by 2.2% in 9M 2023/24. In Germany, net sales of HORNBACH Baumarkt AG decreased by 2.9% to EUR 2,225.2 million (9M 2022/23: EUR 2,292.4 million) while net sales outside of Germany grew by 0.4% to EUR 2,383.4 million (9M 2022/23: EUR 2,374.7 million). In total, the international share of sales of HORNBACH Baumarkt AG subgroup rose from 50.9% to 51.7%.

Online sales (including Click & Collect) accounted for 12.9% of HORNBACH Baumarkt subgroup’s total sales in 9M 2023/24 (9M 2022/23: 14.5%) and remained well above pre-Covid levels (2019/20: 9.7%). Compared with the previous year’s period online sales declined y-o-y by 12.0% to EUR 596 million in 9M 2023/24.

In the first ten months of the calendar year HORNBACH Baumarkt maintained its market share in Germany on a high level and increased its share across most international markets. Between January and October 2023, the market share of HORNBACH Baumarkt (GfK⁵⁾) stood at 15.0% (2022: 14.9%) in Germany, 36.2% in Czechia (2022: 34.3%), 26.9% in the Netherlands (2022: 25.8%) and 14.1% in Switzerland (2022: 13.6%).

“With our powerful combination of every-day-low-price strategy and strong own brands, we have a compelling customer proposition. While some customers – especially in Germany – are postponing larger projects, smaller renovation work and projects involving energy efficiency measures continue to be high on the priority list. We are continuously expanding business areas and service offerings along the relevant growth opportunities. For example with the acquisition of Seniovo, a highly digitalized start-up that specializes in barrier-free bathroom conversions. Another example is the extension of our range of insulation products and energy generation systems as well as services and advice relating to energy-saving measures in a customer-oriented manner," says Erich Harsch, Chairman of the Board of Management of HORNBACH Baumarkt AG.

The Berlin-based start-up Seniovo is part of the HORNBACH Baumarkt AG Group since December 1, 2023. The collaboration with Seniovo strengthens the subgroup's existing trade service in Germany and offers an entry into the growth market of serial renovations.

The HORNBACH Baustoff Union GmbH (HBU) subgroup recorded a decline in net sales by 10.6% in Q3 2023/24 to EUR 104.3 million (Q3 2022/23: EUR 116.6 million) driven by the weaker development in the German construction industry. In 9M 2023/24 net sales declined by 7.6% to EUR 317.2 million (9M 2022/23: EUR 343.2 million). The subgroup currently operates 39 builders’ merchant outlets in south-western Germany and close to the border in France (Grand Est).

Earnings development further improved in Q3 2023/24

With EUR 48.1 million the adjusted EBIT of HORNBACH Group came in just 1.7% below Q3 2022/23 (EUR 48.9 million). Gross margin notably improved from 32.4% to 33.4% in Q3 2023/24 due to lower purchasing costs based on declining raw material prices. Store running costs and administration costs declined during the period despite an increase in wages. In 9M 2023/24 adjusted EBIT amounted to EUR 269.4 million (9M 2022/23: EUR 326.3 million) resulting in an adjusted EBIT margin at 5.5% (9M 2022/23: 6.5%).

Adjusted EBIT in the HORNBACH Baumarkt subgroup in 9M 2023/24 decreased to EUR 231.5 million (9M 2022/23: EUR 279.2 million) and in the HORNBACH Baustoff Union subgroup to EUR 8.3 million (9M 2022/23: EUR 18.3 million). HORNBACH Immobilien subgroup increased adjusted EBIT to EUR 48.6 million (9M 2022/23: EUR 43.5 million). Earnings per HORNBACH Holding share stood at EUR 9.59 (9M 2022/23: EUR 13.08).

Based on the results achieved after nine months, the FY 2023/24 net sales and adjusted EBIT are expected to be in the mid to lower range of the guidance published on September 15, 2023 which indicated sales at or slightly below the previous year’s level and a decline in adjusted EBIT of 10% to 25%. This is in line with the consensus estimates available as of today.

 

Table 2: Miscellaneous key figures HORNBACH Holding AG & Co. KGaA Group

^{5) GfK definition: DIY stores bigger than 1,000 sqm; Data available for Germany, Netherlands, Austria, Switzerland and Czechia}

^{6) Of which 169 HORNBACH DIY stores with garden centers and two BODENHAUS outlets}

^{7) Sales area BHB: Closed building (warm or cold): 100%; covered open space (cold): 50 %; building material drive-in (cold): 50 %; non-covered open  space (cold): 25 %.}

^{8) Number of employees, including passive employees}

Note

The Quarterly Statement of the HORNBACH Holding AG & Co. KGaA Group for Q3/9M 2023/24 is available online at: www.hornbach-holding.de. The analyst and investor quarterly update call on the Q3 results will be held at 8:30 a.m. (CET). Please register here: https://87399.choruscall.eu/links/hornbachholding_endp.html

About HORNBACH Group

HORNBACH Group is an independent, family-run retail group under the umbrella of HORNBACH Holding AG & Co. KGaA, which is listed on the Frankfurt Stock Exchange and represented in the SDAX. The largest subsidiary, HORNBACH Baumarkt AG, operates 171 DIY megastores with garden centers (incl. specialist stores) and online shops in nine European countries. The Group also includes HORNBACH Baustoff Union, a regional builders' merchant company with 39 locations in southwestern Germany and France, as well as HORNBACH Immobilien AG, which develops retail real estate for the Group. In the financial year 2022/23 (reporting date: February 28, 2023), the HORNBACH Group generated net sales of EUR 6.3 billion, making it one of the five largest DIY and garden retail companies in Europe. The Group has a workforce of more than 25,000 employees.

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