HORNBACH Group reconfirms outlook – slower start to spring season as expected

• Consolidated net sales decreased only slightly by 2.2% in Q1 2023/24 despite strong headwinds due to bad weather at the start of the key DIY and gardening season
• Against a challenging backdrop HORNBACH continued to increase market share in and outside of Germany
• Adjusted consolidated operating earnings (EBIT) decreased by 26.2% to EUR 109.4 million
• Full-year outlook confirmed: Net sales at about last year’s level, adjusted EBIT
  for fiscal 2023/24 with downside risk (-5% to -15%) in light of the challenging macro environment

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

^{1) Excluding currency items; including BODENHAUS and online sales
2) Adjusted to exclude non-operating income and expenses
Rounding up or down may lead to discrepancies between percentages and totals. Percentage figures calculated on basis of EUR 000s.}

Bornheim (Palatinate), Germany, June 23, 2023.

The HORNBACH Group (HORNBACH Holding AG & Co. KGaA Group; ISIN: DE0006083405) recorded consolidated net sales in the first quarter (Q1) 2023/24 (March 1, 2023 to May 31, 2023) of EUR 1,773 million (-2.2%). Sales were specifically impacted in March and April by cold and rainy weather conditions across continental Europe at the start of the main DIY and gardening season. May sales picked up and were ahead of previous year’s figures. Adjusted EBIT declined y-o-y by 26.2% to EUR 109.4 million based on the weaker top line in March and April as well as ongoing inflationary and cost pressures. Earnings per share in Q1 2023/24 decreased to EUR 4.15 from EUR 6.14 in the previous year. For the current financial year 2023/24 HORNBACH continues to expect sales at about previous year’s level (EUR 6,263 million) as well as the adjusted EBIT to potentially decline by approx. 5% to 15% below the level of the 2022/23 financial year (EUR 290.1 million). This is in line with the outlook published on May 16, 2023.

“The unusually cold and rainy spring weather across continental Europe affected our seasonal sales in this first quarter, in particular with regard to the gardening and outdoor products. However as the weather has improved in May and June we have seen an uptick in sales as well as in the bottom line, and we are making further progress to rightsize inventory. We continue to focus on the cost base analyzing in detail the operating expenses in our administration and in our stores. In doing so, we always act with a sense of proportion and consistently in the interests of our customers", commented Erich Harsch, CEO of HORNBACH Baumarkt AG.

At HORNBACH Baumarkt AG, the largest operating subgroup (DIY retail) which operated a total of 171 DIY megastores with garden centers and online shops in nine European countries as of May 31, 2023, net sales decreased by 2.2% to EUR 1,667.6 million (2022/23: EUR 1,705.3 million). On a like-for-like basis and exchange rate adjusted, DIY sales showed subgroup-wide decline of 3.2% in Q1 2023/24 (2022/23: +5.3%).

Net sales outside of Germany increase slightly

In Germany, net sales of HORNBACH Baumarkt AG decreased by 5.2% to EUR 808.5 million in the first quarter (2022/23: EUR 853.2 million). Like-for-like sales were down 5.7% (2022/23: +4.4%). Net sales outside of Germany grew by 0.8% to EUR 859.2 million (2022/23: EUR 852.1 million). The international share of sales at the HORNBACH Baumarkt AG subgroup rose from 50.0% to 51.5%. On a like-for-like basis and exchange rate adjusted, sales in Other European Countries declined by 0.8% (2022/23: +6.2%).

Online sales (including Click & Collect) accounted for 13.3% of HORNBACH Baumarkt subgroup’s total sales in Q1 2023/24 (2022/23: 15.3%), and remained well above pre-Covid levels. Compared with previous year’s quarter online sales declined y-o-y by 18.1% to EUR 221.0 million in Q1 2023/24.

In the first months of the calendar year HORNBACH Baumarkt continued to increase its market share in Germany as well as across most international markets. Between January and April 2023, the market share of HORNBACH Baumarkt (GfK³⁾) in Germany rose to 15.1% compared to 14.9% in the previous year’s period. HORNBACH also expanded successfully its market shares in Czechia (2023: 36.2%, 2022: 34.1%), the Netherlands (2023: 27.2%, 2022: 25.8%) and Switzerland (2023: 14.5%, 2022: 13.6%).

The HORNBACH Baustoff Union GmbH (HBU) subgroup recorded sales of EUR 105.4 million (2022/23: EUR 108.0 million) in the first quarter. The subgroup currently operates 39 builders’ merchant outlets in south-western Germany and close to the border in France (Lorraine).

Earnings impacted by slow start to the year as well as persistent inflationary pressures

With EUR 109.4 million the adjusted EBIT of HORNBACH Group came in 26.2% below Q1 2022/23 (EUR 148.3 million) mainly due to a subdued start into the season. In addition, inflationary pressures continued to affect gross margin and operating costs, especially with regard to increasing wages as well as one-off inflation support payments. The adjusted EBIT margin stood at 6.2% (2022/23: 8.2%).

Adjusted EBIT in the HORNBACH Baumarkt subgroup decreased to EUR 96.5 million (2022/23: EUR 133.7 million) and in the HORNBACH Baustoff Union subgroup to EUR 2.8 million (2022/23: EUR 5.1 million). HORNBACH Immobilien subgroup increased adjusted EBIT to EUR 16.3 million (2022/23: EUR 14.7 million).

Earnings per HORNBACH Holding share stood at EUR 4.15 (2022/23: EUR 6.14).

HORNBACH confirms cautious outlook for 2023/24

In line with the outlook given on May 16, 2023, HORNBACH continues to expect Group net sales at about previous year’s level (EUR 6,263 million) in the 2023/24 financial year. As outlined in May due to the slower start to the spring season and the broader macroeconomic challenges, management continues to see a downside risk for the adjusted EBIT of approx. 5% to 15% below the level of the 2022/23 financial year (EUR 290.1 million).

“As we expected, earnings have slightly declined in Q1 2023/24 largely due to the subdued start into the spring season. However, we saw a strong acceleration in business activities in May and also in June. Thus, we remain confident that we can deliver against full year guidance as sales have picked up since and EBIT has stabilized in May”, said Albrecht Hornbach, CEO of HORNBACH Management AG. “However, we are mindful that some uncertainty remains, especially with regards to consumer spending priorities over the summer”.

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

^{3) GfK definition: DIY stores bigger than 1,000 sqm; Data available for Germany, Netherlands, Austria, Switzerland and Czechia
4) Of which 169 HORNBACH DIY stores with garden centers and two BODENHAUS outlets
5) 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 %.
6) Number of employees, including passive employees}

Note
The Quarterly Statement of the HORNBACH Holding AG & Co. KGaA Group for Q1 2023/24 is available online at: www.hornbach-holding.de.

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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