HORNBACH Group sales and earnings stabilized in Q2 2023/24

• Net sales and earnings development has stabilized in Q2 2023/24 following a challenging Q1 spring season
• Consolidated Group sales increased by 1.1% in Q2 2023/24 – HORNBACH Baumarkt grew sales by 1.9%
• HORNBACH continued to increase market share in Germany and key international markets
• Adjusted EBIT for the Group decreased by 13.3% in Q2 2023/24 to EUR 111.9 million – H1 2023/24 adjusted EBIT at EUR 221.3 million (-20.2%)
• Full-year 2023/24 outlook as published on September 15, 2023: Net sales expected to be at or slightly below last year’s level, adjusted EBIT between -10% to -25% in light of significant ongoing macro headwinds

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

¹⁾ 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
²⁾ Adjusted to exclude non-operating income and expenses
³⁾ 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, September 27, 2023.

The HORNBACH Group (HORNBACH Holding AG & Co. KGaA Group; ISIN: DE0006083405) increased consolidated net sales in the second quarter (Q2) 2023/24 (June 1, 2023 to August 31, 2023) to EUR 1,667.9 million (+1.1%). Customer demand for DIY and home improvement supplies remained at a good level in the summer months despite persistently high inflation in Germany and re-emerging travel activity. Higher customer footfall in the stationary stores stood against a slight decline in average customer basket spend. In total, half-year (H1) 2023/24 net sales were slightly behind the previous year at EUR 3,441.3 million (-0.6%) due to a weaker Q1 with cold and wet weather delaying the start of the main DIY and gardening season. Adjusted EBIT development improved in Q2 2023/24 compared to Q1 2023/24 with a y-o-y decline by 13.3% to EUR 111.9 million in Q2. For H1 2023/24 adjusted EBIT came in at EUR 221.3 million (-20.2%). These figures confirm the preliminary results released on September 15, 2023 along with the update of the full-year guidance.

“We are encouraged by the sales and earnings development in Q2, amid ongoing macroeconomic uncertainty. Demonstrating our resilience we have delivered further market share gains across several geographies, and are particularly pleased with the strong performance in the Netherlands and Czechia. Our experienced management team has a clear track record in successfully managing short-term challenges during market cycles. We have confidence in the attractiveness of our business model leveraging the benefits of our balanced geographic diversification and leading ICR offering. The longer-term outlook for our business is positive, supported by structural growth drivers in our markets. There is a significant ongoing need to upgrade and modernize existing buildings across Europe, particularly with regard to improving energy efficiency”, said Albrecht Hornbach, CEO of HORNBACH Management AG.

HORNBACH Baumarkt grows by 1.9% in Q2 2023/24

At HORNBACH Baumarkt AG, the largest operating subgroup (DIY retail) which operated a total of 172 DIY megastores with garden centers and online shops in nine European countries as of August 31, 2023, net sales increased by 1.9% in Q2 2023/24 came in close to the previous year’s level in H1 2023/24 at EUR 3,228.1 million (H1 2022/23: EUR 3,236.8 million). On a like-for-like basis and exchange rate adjusted, sales in the subgroup decreased by 1.3% in H1 2023/24 (H1 2022/23: +1.9%). In Germany, net sales of HORNBACH Baumarkt AG decreased by 2.4% to EUR 1,563.5 million in H1 2023/24 (H1 2022/23: EUR 1,601.7 million). Net sales outside of Germany grew by 1.8% to EUR 1,664.6 million (H1 2022/23: EUR 1,635.1 million). In total, the international share of sales of HORNBACH Baumarkt AG subgroup in H1 2023/24 rose from 50.5% to 51.6%.

Online sales (including Click & Collect) accounted for 13.2 % of HORNBACH Baumarkt subgroup’s total sales in H1 2023/24 (H1 2022/23: 14.8%) and remained well above pre-Covid levels (2019/20: 9.8%). Compared with the previous year’s period online sales declined y-o-y by 11.5% to EUR 425.0 million in H1 2023/24.

In the first half of the calendar year HORNBACH Baumarkt continued to increase its market share in Germany as well as across most international markets. Between January and July 2023, the market share of HORNBACH Baumarkt (GfK⁴⁾) rose to 14.8% (2022: 14.7%) in Germany, to 36.1% in Czechia (2022: 34.0%), to 26.5% in the Netherlands (2022: 25.3%) and to 13.9% in Switzerland (2022: 13.3%).

“Home improvements remain a high priority for consumers across our DIY markets. In Q2 we have seen some catch up demand for gardening assortments as well as good demand for renovation projects. The customer frequency in our stationary stores remained strong, albeit with slightly smaller basket sizes reflecting some cautiousness on the part of consumers. Looking ahead, we continue to focus on our operating performance and will carefully balance this against making key investments to ensure we are well positioned to capture growth when conditions recover”, commented Erich Harsch, CEO of HORNBACH Baumarkt AG.

The HORNBACH Baustoff Union GmbH (HBU) subgroup recorded a decline in net sales by 9.4% in Q2 2023/24 to EUR 107.5 million (Q2 2022/23: EUR 118.6 million) driven by the weaker development in the construction industry. In H1 2023/24 net sales declined by 6.0% to EUR 212.9 million (H1 2022/23: EUR 226.6 million). The subgroup currently operates 40 builders’ merchant outlets in south-western Germany and close to the border in France (Grand Est).

Earnings situation improved in Q2 whilst inflationary and cost pressures persisted

With EUR 111.9 million the adjusted EBIT of HORNBACH Group came in 13.3% below Q2 2022/23 (EUR 129.1 million). Inflationary pressures continued to affect gross margin and operating costs, especially with regard to increasing wages as well as one-off inflation support payments. In addition, there were higher IT investments. In H1 2023/24 adjusted EBIT amounted to EUR 221.3 million (H1 2022/23: EUR 277.4 million) resulting in an adjusted EBIT margin at 6.4% (H1 2022/23: 8.0%).

Adjusted EBIT in the HORNBACH Baumarkt subgroup in H1 2023/24 decreased to EUR 195.1 million (H1 2022/23: EUR 245.2 million) and in the HORNBACH Baustoff Union subgroup to EUR 6.6 million (H1 2022/23: EUR 13.7 million). HORNBACH Immobilien subgroup increased adjusted EBIT to EUR 32.8 million (H1 2022/23: EUR 28.3 million). Earnings per HORNBACH Holding share stood at EUR 7.83 (H1 2022/23: EUR 11.37).

HORNBACH anticipates heightened macroeconomic challenges

As announced on September 15, 2023, HORNBACH Group expects FY 2023/24 sales at or slightly below previous year’s level (EUR 6,263.1 million) and the FY adjusted EBIT to decline by 10% to 25% below the level of the 2022/23 financial year (EUR 290.1 million). This guidance is based on the shifting macroeconomic situation and outlook for Germany and the EU with stickier than expected inflation, rising interest rates and weaker consumer sentiment.

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

⁴⁾ GfK definition: DIY stores bigger than 1,000 sqm; Data available for Germany, Netherlands, Austria, Switzerland and Czechia
⁵⁾ Of which 170 HORNBACH DIY stores with garden centers and two BODENHAUS outlets
⁶⁾ 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 %.
⁷⁾ Number of employees, including passive employees

 Note
The Half-Year Financial Report of the HORNBACH Holding AG & Co. KGaA Group for Q2/H1 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 172 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 40 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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