Hornbach maintains sales growth – adjusted EBIT well ahead of pre-Covid level

• Steady customer demand for construction and DIY products: Consolidated sales up 8.1% on Q1 2021 / 22
• At EUR 148.3 million, adjusted EBIT well above pre-pandemic levels by more than 50%, although down 12.3% from previous year’s record result
• Macroeconomic risks and the challenges with regard to inflation, supply chain and product pricing have become further pronounced and persistent in recent weeks and in the outlook
• Full-year outlook for 2022/23 revised on June 13, 2022 with confirmed slight sales growth assumption but now expecting adjusted EBIT level to decline around a low double digit percentage range

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

¹⁾ In constant currencies; includes sales from all stores that have been open for at least one year including 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 29, 2022.
The Hornbach Group (Hornbach Holding AG & Co. KGaA Group) further increased its sales compared with the previous year's record figure in the first quarter (Q1) of 2022/23 (March 1 to May 31, 2022) on the back of robust customer demand. Consolidated sales grew by 8.1% to EUR 1,813.4 million (2021/22: EUR 1,678.1 million). Multiyear comparison underscores that the company’s profitability remains significantly higher than in the years prior to the Covid pandemic. At EUR 148.3 million, operating earnings adjusted to exclude non-operating earnings items (adjusted EBIT) for Q1 2022/23 came in below the record figure reported for the previous year’s quarter (EUR 169.1 million), but strongly above Q1 2019/20 by 53.1%. For the current 2022/23 financial year management still expects a slight sales growth but the adjusted EBIT level to decline around a low double digit percentage range – in line with the revised guidance as of June 13, 2022.

“Demand for construction and DIY products remains strong and in terms of sales, Q1 2022/23 has been a record quarter for the company. We are convinced that the focus of consumers on their immediate surroundings and home is a longer-term trend that will continue. However, we do not know how ongoing inflation and geopolitical uncertainty will impact on consumer behavior in the coming months", commented Erich Harsch, CEO of HORNBACH Baumarkt AG.”

DIY stores with like-for-like growth of 5.3%

At Hornbach Baumarkt AG, the largest operating subgroup (DIY retail) which operated a total of 169 DIY megastores with garden centers and online shops in nine European countries as of May 31, 2022, net sales increased by 8.2% to EUR 1,705.3 million (2021/22: EUR 1,575.8 million). On a like-for-like basis and exchange rate adjusted, DIY sales showed subgroup-wide growth of 5.3% in the first three months (2021/22: 4.3%).

Net sales at the Hornbach DIY stores in Germany increased by 4.7% to EUR 853.2 million in the first quarter (2021/22: EUR 814.9 million). Like-for-like sales were up 4.4% (2021/22: minus 0.1%). In Q1 2021/22 stores in Germany were still affected by pandemic-related restrictions. However, these did not have a significant negative impact due to partial openings of the garden areas and the extensively used Click & Collect option.

Net sales outside of Germany grew by 12.0% to EUR 852.1 million (2021/22: EUR 760.9 million). Developments in the rest of Europe were partly characterized by catch-up effects following closures in the previous year, particularly in the Netherlands and the Czech Republic. In other regions, performance was below the very strong prior-year figures (Austria, Switzerland), partly due to unfavorable weather conditions at the start of the spring season. The international share of sales at the Hornbach Baumarkt AG subgroup rose from 48.3% to 50.0%. On a like-for-like basis and exchange rate adjusted, sales in Other European Countries grew by 6.2% (2021/22: 9.5%).

Online sales (including Click & Collect) remained on a much higher level than pre-Covid and accounted for 15.3% of Hornbach Baumarkt subgroup’s total sales in Q1 2022/23. Compared with previous year’s quarter where stationary sales were still restricted in a number of regions, as expected, demand for Click & Collect in particular, was significantly lower. Sales from direct deliveries were only slightly behind the previous year. In total, online sales declined y-o-y by 30.4% to EUR 261.4 million in Q1 2022/23.

The Hornbach Baustoff Union GmbH (HBU) subgroup increased its sales by 6.0% to EUR 108.0 million (2021/22: EUR 101.9 million) adding additional growth on top of previous year’s record development of plus 20.5%. The subgroup currently operates 35 builders’ merchant outlets in south-western Germany, including a location in Börrstadt (Rhineland-Palatinate) acquired as of March 1, 2022, as well as two locations close to the border in France (Lorraine). The acquisition of two builders' merchant stores in Saarbrücken and Saarlouis will bring the total number of locations to 39 as of July 1, 2022.
Adjusted EBIT significantly above pre-Covid levels, but below previous year's figure

With EUR 148.3 million the adjusted EBIT of Hornbach Group came out 53.1% above pre-Covid levels (2019/20: EUR 96.9 million). Compared to the record quarter Q1 2021/22, adjusted EBIT declined by 12.3%, mainly due to inflationary pressures and higher transportation and logistics costs weighing on the gross margin. Earnings were also impacted by increased store operating costs and a further normalization of marketing spending, which had been reduced during the pandemic. The adjusted EBIT margin for Q1 2022/23 is 8.2% in Q1 2022/23, 1 percentage point higher than for the pre-pandemic first quarter in 2019/20.

Earnings per Holding share grew to EUR 6.14 (2021/22: EUR 5.83) due to the higher stake of 90.86% in Hornbach Baumarkt AG following the delisting offer which was successfully concluded as of February 28, 2022.

Adjusted outlook confirmed: Slight sales growth and low double-digit decline in adjusted EBIT expected for the 2022/23 financial year

On June 13, 2022, Hornbach Group confirmed its full-year 2022/23 sales outlook expecting a slight increase from the 2021/22 financial year (EUR 5,875.0 million). However, the earnings outlook has been revised, now reflecting increased macroeconomic risks as well as more pronounced and persistent challenges with regard to inflation, supply chain and product pricing in the second quarter. The full-year adjusted EBIT level is expected to decline around a low double digit percentage range, below the record number of EUR 362.6 million in FY 2021/22.

“We observe that purchasing and logistics costs have continued to rise in recent weeks and expect inflation to remain elevated for the foreseeable future. Given the ongoing uncertainty, we prefer to adopt a cautious approach to our earnings outlook. We remain focused on managing our cost base closely in combination with delivering our organic growth strategy – our expansion plans and ongoing investments in Interconnected Retail will not be affected”, said Albrecht Hornbach, CEO of Hornbach Management AG.

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

³⁾ of which 167 Hornbach DIY stores with garden centers and two BODENHAUS outlets
⁴⁾ 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%.
⁵⁾ Number of employees as of May 31, including passive employees

Note
The Quarterly Statement of the Hornbach Holding AG & Co. KGaA Group for Q1 2022/23 is available online at: www.hornbach-holding.com.

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 169 DIY megastores with garden centers as well as two specialist stores and online stores in nine European countries. The Group also includes HORNBACH Baustoff Union, a regional builders' merchant company with 37 locations in southwestern Germany and France, as well as HORNBACH Immobilien AG, which develops retail real estate for the Group. In the financial year 2021/22 (reporting date: February 28, 2022), the HORNBACH Group generated net sales of EUR 5.9 billion, making it one of the five largest DIY and garden retail companies in Europe. The Group has a workforce of around 25,000 employees.

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